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The multiplier will increase if the marginal propensity to consume? ______ or the marginal tax rate? ______.

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The multiplier will increase if the marginal propensity to consume DECREASES or the marginal tax rate DECREASES.

Multiplier = 1 / 1-MPC
MPC or marginal propensity to consumer = change in consumption / change in income

Taxes and imports are identified as leakages. Leakages are money spent by an individual but not on domestic goods or services. Leakages reduces the size of the multiplier. Thus, the lesser the amount of leakages, the bigger the multiplier.

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