Question

What is static multiplier

Answer 1

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Answer:

The concept of static multiplier implies that changes in investment causes change in income instantaneously. It means that there is no time lag between the change in investment and the change in income. It implies that the moment a rupee is spent on investment project, society's income increases by a multiple.

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Answer 2

In Macroeconomics,static multiplier basically refers the prompt or immediate change in income level in the economy due to any change in the investment level.

Explanation:

According to the concept of static multiplier,the time duration between the change in investment level in the economy and the income level is minimal and once the investment level changes,there is an immediate and instant change in the income level of the country mainly due to the multiplier effect.It implies that as there is any change in public/government or private/capital or business investment level in the country,the income level of the people in the economy will react or change immediately through multiplier effect without any time gap.