If the MPC increases from 0.75 to 0.80 and there are no income taxes or imports,
A. the multiplier becomes larger.
B. the multiplier becomes smaller.
C. the slope of the consumption function becomes smaller.
D. the slope of the savings function becomes larger.
Answer:A
If the MPC increases from 0.75 to 0.80 and there are no income taxes or imports,
A. the multiplier becomes larger. B. the multiplier becomes smaller. C. the slope of the consumption function becomes smaller. D. the slope of the savings function becomes larger.