Question

If the value of the multiplier is 4, calculate the value of MPC and MPS.

If the value of the multiplier is 4, what will be value of MPC and MPS.

Answer 1

k = 4

k = `1/(1-"MPC")`

4 = `1/(1-"MPC")`

1 - MPC = `1/4`

1 - MPC = 0.25

MPC = 1 − 0.25

∴ MPC = 0.75

MPS = 1 − MPC 

MPS = 1 − 0.75

∴ MPS = 0.25