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Why value of multiplier is low

In poor countries people spend a big percentage of their income so that APC and MPC are high. Yet, the value of multiplier is low. Explain why?

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Working of the multiplier method is based on one basic supposition: that there exists, surplus capacity in the economy therefore that whenever consumption expenses rises (implying raise in demand) there is an equivalent increase in production (implying rise in income). However poor countries lack in production capacity.

Accordingly, if demand increases (in terms of rise in consumption expenses), there is increasing pressure of demand on existing output (that is, implying inflation or rise in prices) instead of  increase in output or income.

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