Correct Answer: 2 and 3

Solution : The correct answer is (c) 2 and 3

When the marginal propensity to consume (MPC) is between 0 and 1, the value of the spending multiplier will be greater than 1. Typically, it falls within the range of 2 and 3. For example, if the MPC is 0.8, the spending multiplier would be 1 / (1 - 0.8) = 5, indicating that a $1 increase in autonomous expenditure would result in a $5 increase in real GDP.