Country X’s marginal propensity to consume (MPC) is 0.7. Its marginal propensity to save (MPS), marginal rate of taxation (MRT) and marginal propensity to import (MPM) are all 0.1. Which change would be most likely to produce the largest rise in the national income multiplier?
- Aa 5% increase in the MPC together with a 5% fall in the MRT
- Ba 5% increase in the MPM together with a 5% fall in the MRT
- Ca 5% increase in the MPS together with a 5% fall in the MPM
- Da 5% increase in the MRT together with a 5% fall in the MPS