Economy, asked by aranyakadak2003, 4 months ago

is there any relation between multiplier and mpc?show it with an example

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Answered by aryanlegend30

3

Answer:

Investment Multiplier shares a direct positive relationship with marginal propensity to consume. That is, higher the value of MPC, higher will be the value of investment multiplier and vive-versa. That is Higher the proportion of increased income spend on consumption, higher will be value of investment multiplier.

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