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The numerical value of the spending multiplier is smaller the

User Bagusflyer
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The numerical value of the spending multiplier is smaller the lower the marginal propensity to consume (MPC).
User Ben Romberg
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The numerical value of the spending multiplier is smaller the lower the marginal propensity to consume (MPC).

The spending multiplier is a measure of the effect that changes in government spending or investment have on the economy. It is calculated as:

Spending multiplier = 1 / (1 - MPC)

where MPC is the marginal propensity to consume, which is the fraction of additional income that is spent on consumption.

If the MPC is high, then the spending multiplier will be high, meaning that a given increase in government spending or investment will have a larger effect on the economy. Conversely, if the MPC is low, then the spending multiplier will be low, meaning that a given increase in government spending or investment will have a smaller effect on the economy.
User Lacton
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