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Question
State the concept of the super multiplier.
Short Note
Solution
Super Multiplier: (k and β interaction):
- The super multiplier is greater than the simple multiplier which includes only autonomous investment and no induced investment, while the super multiplier includes induced investment.
- In order to measure the total effect of initial investment on income, Hicks has combined the k and β mathematically and given it the name of the Super Multiplier.
- The super multiplier is worked out by combining both induced consumption and induced investment.
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Multiplier
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