Question

32. When the level of consumption increases by 750 and income increases by 1,000.What will be the
value of multiplier?
(2 Points)
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Answer 1

Answer:

when mpc is greater than mps, the value of investment multiplier will be greater than 5. ... This is because MPC + MPS = 1. Now, as MPC > MPS. Let us assume that MPC = 0.7 and MPS = 0.3.