The smaller the mpc, the the income-expenditure multiplier and the the effect of a change in autonomous spending on short-run equilibrium output.

A. larger; smaller
B. larger; larger
C. smaller; larger
D. smaller; smaller

Answer: D

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The smaller the mpc, the ________ the income-expenditure multiplier and the ________ the effect of a change in autonomous spending on short-run equilibrium output.