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What is the Relation Between Marginal Propensity to Consume and Multiplier? - Economics

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प्रश्न

What is the relation between marginal propensity to consume and multiplier?

उत्तर

MPC and the value of multiplier has direct relationship. Higher the MPC more will be the value of multiplier

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Investment Multiplier and Its Mechanism
  या प्रश्नात किंवा उत्तरात काही त्रुटी आहे का?
2017-2018 (March) All India Set 3

संबंधित प्रश्‍न

Calculate the marginal propensity to consume if the value of multiplier.


The value of the multiplier is: (choose the correct alternative)

a. `1/"MPC"`

b. `1/"MPS"`

c. `1/(1-"MPS")`

d. `1/(MPC- 1)`


If MPC = 1, the value of the multiplier is ______


Calculate the marginal propensity to consume if the value of multiplier is 4.


Define investment multiplier.


Explain the relationship between investment multiplier and marginal propensity to consume. 


Answer the following question.
Find the value of additional investment made by the government, when MPC 05 and the increase in income (ΔY) = ₹ 1000.


Suppose in an economy, the initial deposits of ₹ 400 crores lead to the creation of total deposits worth ₹ 4000 crores.
Under the given situation the value of reserve requirements would be ____________.


Keynes derived Investment Multiplier from Kahn’s ______ 


The value of Keynesian Investment Multiplier depends on ______ 


The formula of investment multiplier in terms of MPS is (1)


For a hypothetical economy, assuming there is an increase in the marginal Propensity to Consume (MPC) from 75% to 90% and change in investment to be ₹ 1,000 crore.
Using the concept of investment multiplier, calculate the increase in income due to change in Marginal Propensity to Consume (MPC).


For a hypothetical economy, assuming there is an increase in the Marginal Propensity to Consume (MPC) from 80% to 90% and change in investment to be ₹ 1000 crore. 

Using the concept of investment multiplier, calculate the increase in income due to change in Marginal Propensity to Consume.


If a linear consumption curve takes a parallel shift downwards, the value of investment multiplier will ______.


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