# If MPC = 1, the value of the multiplier is ______ - Economics

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

#### Options

• 0

• 1

• Between 0 and 1

• Infinity

#### Solution

If MPC = 1, the value of the multiplier is Infinity.

Explanation:

The value of the multiplier is 1/(1 - "MPC")

where

MPC = Marginal propensity to consume

Given that

MPC = 1

= 1/0 = ∞

Thus, the value of multiplier becomes infinity.

Concept: Investment Multiplier and Its Mechanism
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