what is investments? how an investment multiplier works and how it is calculated?
Answers
Explanation:
The investment multiplier refers to the stimulative effects of public or private investments. It is rooted in the economic theories of John Maynard Keynes. The extent of the investment multiplier depends on two factors: the marginal propensity to consume (MPC) and the marginal propensity to save (MPS)
The Size or Value of Investment Multiplier:
Thus, multiplier =∆Y/∆I =1/ 1-b equals marginal propensity to save (MPS) the value of investment multiplier is equal to 1/1-b = 1/s where s stands for marginal propensity to save.
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Answer:
the action or process of investing money for profit.
The investment multiplier refers to the stimulative effects of public or private investments. It is rooted in the economic theories of John Maynard Keynes. The extent of the investment multiplier depends on two factors: the marginal propensity to consume (MPC) and the marginal propensity to save (MPS).
Explanation:
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