The value of the expenditure multiplier will fall due to which leakage? A. A dec

Question

The value of the expenditure multiplier will fall due to which leakage? A. A decrease in the propensity to import goods and services B. An increase in the propensity to save C. An increase in government spending The value of the expenditure multiplier will fall due to which leakage? A. A decrease in the propensity to import goods and services B. An increase in the propensity to save C. An increase in government spending A. A decrease in the propensity to import goods and services B. An increase in the propensity to save C. An increase in government spending

Explanation / Answer

Option B

The formula being used = 1/(MPS)

With the increase in MPS, the value of expenditure multiplier reduces

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