Question

1.2.2 What is the relationship between the marginal propensity to consume (mpc)

and the multiplier?​

Answer 1

The relationship between the Multiplier (K) and Marginal Propensity to Consume (MPC) is that, the multiplier relies on the MPC (Marginal Propensity to Consume) in an open economy. So, if there is an increase in the MPC it will eventually be an increase in the Multiplier and vice verse