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Which factors reduce the effect of multiplier ?

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1. Propensity to save : The higher will be the people’s tendency of savings, lower will be the value of Multiplier.

2. Payment of loans : If income will be used for the repayment of old loans, the value of multiplier will reduce.

3. Currency stock: If people stock their currency in either banks or with themselves, it will reduce the consumption and lower the value of multiplier.

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