Question

Explain how each will impact the size of autonomous expenditure multiplier, other variables constant.

(a) Decrease in marginal propensity to consume
(b) Decrease in marginal propensity to import

Answer 1

multilier= 1/(1-MPC+MPI)

so if mpC decreases, the denominator gets larger, so the multipler goes down.
If the mpi decreases, the denominator gets larger, and the multilier increases.