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Question
The value of multiplier is ______
Options
`1/"MPC"`
`1/"MPS"`
`1/(1 - "MPS")`
`1/("MPC" - 1)`
MCQ
Fill in the Blanks
Solution
The value of multiplier is `underline(1/"MPS").`
Explanation:
M = `1/"MPS"`
M = `1/(1 - "MPC")`
A multiplier is the amount of new income generated as a result of the addition of additional income.
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Investment Multiplier and Its Mechanism
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