The Larger the MPC,the Larger the Value of the Multiplier

question 81

True/False

The larger the MPC,the larger the value of the multiplier.

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Definitions:

Multiplier

In economics, a factor that quantifies the impact of spending changes in an economy, particularly the increase in income or economic activity resulting from an injection of spending.

Deflationary Gap

A situation where aggregate demand is less than the total supply of goods and services, leading to deflation and unemployment.

Equilibrium GDP

The level of Gross Domestic Product at which aggregate supply equals aggregate demand, indicating a stable economy.

Full Employment GDP

Full Employment GDP is the output level produced by an economy when all its labor and resources are employed at their maximum efficiency.