The multiplier effect
A. is nonexistent in the Keynesian model.
B. has no effect if the cyclical deficit is positive.
C. magnifies small changes in spending into larger changes in output and income.
D. increases the MPC.
Answer:C
The multiplier effect
A. is nonexistent in the Keynesian model. B. has no effect if the cyclical deficit is positive. C. magnifies small changes in spending into larger changes in output and income. D. increases the MPC.