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Calculate the values of the multiplier if MPC = 1, 0 and 9/10. - Economics

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Question

Calculate the values of the multiplier if MPC = 1, 0 and `9/10`.

Numerical
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Solution

Multiplier (K) = `1/(1-"MPC")`

MPC = 1

K = `1/(1-1)`

= `1/0`

= ∞

MPC = 0

K = `1/(1-0)`

= `1/1`

= 1

MPC = `9/10`

K = `1/(1 - 9/10)`

= `1/(1-0.9)`

= `1/0.1`

= 10

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Chapter 20: Multiplier - I : Static and Dynamic - TEST QUESTIONS [Page 20.23]

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R. K. Lekhi and P. K. Dhar Economics [English] Class 12 ISC
Chapter 20 Multiplier - I : Static and Dynamic
TEST QUESTIONS | Q A. 11. | Page 20.23
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