Which Is True Regarding the Marginal Propensity to Consume and the Multiplier

question 65

Multiple Choice

Which is true regarding the marginal propensity to consume and the multiplier?

• A)The lower the MPC,the higher the multiplier.
• B)The higher the MPC,the lower the multiplier.
• C)The MPC equals the multiplier.
• D)The sum of the MPC and the multiplier equals 1.
• E)The lower the MPC,the lower the multiplier.

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Definitions:

Debit Portion

Part of a financial transaction that represents an increase in assets or expenses or a decrease in liabilities or equity, according to double-entry accounting principles.

Credit Portion

The part of a journal entry that records the increase in liabilities or equity or the decrease in assets.

Trial Balance

A financial report that lists the balances of all ledgers accounts on a specified date, used to verify that the total debits equal total credits in the accounting system.

Account Balance

The difference between the total debits and total credits in an account, representing the current amount in that account.