Question

if the marginal propensity to consume is 0.6, find the value of multiplier
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Answer 1

Answer:

Multiplier(k) => Change in income / change in investment = 1/ {1-MPC(c)} where c is the marginal propensity to consume. If MPC= 0.6, then. Multiplier (k) ...

If all new income is either spent or saved, Tom must therefore also have a marginal propensity to save, or MPS, of 0.25 or 25%. Origins of ...