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Spending and Tax Multipliers

Noah Martinez

Noah Martinez

6 min read

Study Guide Overview

This study guide covers multipliers in AP Macroeconomics, including the multiplier effect, MPC, and MPS. It explains the formulas and relationships between these concepts, focusing on the spending multiplier and the tax multiplier. It also provides practice questions and emphasizes key takeaways for exam preparation.

Question 1 of 9

Ready to boost your score? 🚀 What fundamental equation always holds true for the Marginal Propensity to Consume (MPC) and the Marginal Propensity to Save (MPS)?

MPC - MPS = 1

MPC + MPS = 1

MPC * MPS = 1

MPC / MPS = 1