Explain the basic logic behind the multiplier in words

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Reference no: EM131353937

1. Explain the basic logic behind the multiplier in words. Why does it require b, the marginal propensity to consume, to be between 0 and 1?

2. (More difficult) What would happen to the multiplier analysis if b = 0? If b = 1?

Reference no: EM131353937

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