Assume that in a particular economy,MPC = 0.6 and the MPM = 0.2.What is the value of the multiplier?
A)0.6.
B)1.82.
C)1.67.
D)2.
E)5.

Name: Assume that in a particular economy,MPC = 0.6 and the MPM = 0.2.What is the value of the multiplier? A)0.6. B)1.82. C)1.67. D)2. E)5.
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Question

Quizplus · Accepted Answer

The multiplier is calculated as 1 / (1 - MPC + MPM). Here, it is 1 / (1 - 0.6 + 0.2) = 1 / 0.6 = 1.67.

Assume That in a Particular Economy,MPC = 0