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APA
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Business & Marketing
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English (U.S.)
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Business & Marketing

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Please discuss the following questions in a paragraph or two.
1) Explain what the multiplier represents
2) Discuss and explain what effect a reduction in the marginal propensity to consume has on the size of the multiplier.
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Business & Marketing
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Business & Marketing
A multiplier in economics broadly refers to an economic factor that, once changed or increased, results in changes or growth in numerous other correlated variables of the economy. In the GDP perspective, the multiplier effect results in improvements in overall production to be better than the alteration in expenditure that triggered it. The term multiplier frequently is utilized about the association between total national revenue and government expenditure. At the same time, multipliers can be used in breaking down fractional reserve banking, identified as deposit multiplier. The same key multiplier utilized in evaluating the multiplier effect can be calculated as a change in income/change in expenditure and is utilized by companies to measure investment efficiency. The cash supply multiplier is also a different variation of...
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