Question

Q.3. Find MPC when investment multiplier = 1.​

Answer 1

Explanation:

When investment multiplier is 1, the value of marginal propensity to consume is zero.

Multiplier(k) = 1/( 1 - MPC)

=> 1/ (1-MPC ) = 1.

=> 1= 1- MPC.

=> MPC = 1-1 = 0.