Question:

Suppose business confidence increases causing an increase in investment. Based on our understanding of the model presented in Chapter 3, we know with certainty that an increase in investment will cause:

A) an increase in output.

B) an increase in the multiplier.

C) a reduction in the marginal propensity to save.

D) a reduction in the multiplier.

E) both A and D

The answer provided is E.

My question is why D is also correct?

Thank you.