Abstract:
Abstract: The short-run and long-rum marginal propensities to consume are the
critical figures determining consumption, investment, government expenditure,
import, and export multipliers as indicatives how effective and costly national
macroeconomic policy actions .Empirical results reveal that both Bangladeshi shortand
long-run marginal propensities to consume are smaller than unity. Additionally,
from Keynesian macroeconomic theory, the magnitude of the MPC in the economy
determines the consumption, investment, government expenditure, and import and
export multipliers. Therefore, the smaller the MPCs, the smaller the multipliers are,
the larger the countercyclical the policy adjustment must be to achieve a certain
countercyclical macroeconomic policy objective.
