If the marginal propensity to consume is 4/5,what is the multiplier?
A)1/5
B)1
C)5
D)20

Name: If the marginal propensity to consume is 4/5,what is the multiplier? A)1/5 B)1 C)5 D)20
Brand: Quizplus
Rating: 4.9 (39 reviews)

Question

Quizplus · Accepted Answer

The multiplier is calculated as 1/(1-MPC), where MPC is the marginal propensity to consume. Substituting the given value of MPC, we get:
Multiplier = 1/(1-4/5)
= 1/(1/5)
= 5
Therefore, the correct answer is  C) 5.

If the Marginal Propensity to Consume Is 4/5,what Is the Multiplier