Question

what is the value of multiplier if MPC is 1/2?​

Answer 1

Explanation:

Multiplier (k) = 1/MPS = 1/ 0.5 = 2.

Answer 2

Value of multiplier if MPC is 1/2 will be 2.

MPC

1. It's full form is marginal propensity to consume.
2. It tell the change in the level of consumption with a unit change in the level of income.

Multiplier

1. It is measure of increase in national income as a result of change (increase or decrease) in any component of aggregate demand (consumption, investment or government expenditure).
2. It is denoted by k.
3. K = 1/1-MPC.

= 1/1-0.5 = 1/0.5 = 2