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If the value of MPC is 0.9, find the value of the multiplier. - Economics

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Question

If the value of MPC is 0.9, find the value of the multiplier.

Numerical
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Solution

Given: MPC = 0.9

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

= `1/(1-0.9)`

= `1/0.1`

= 10

∴ The value of the multiplier is 10.

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Chapter 12: Theory of Income and Employment - NUMERICAL QUESTIONS [Page 233]

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Frank Economics [English] Class 12 ISC
Chapter 12 Theory of Income and Employment
NUMERICAL QUESTIONS | Q 11. | Page 233
R. K. Lekhi and P. K. Dhar Economics [English] Class 12 ISC
Chapter 20 Multiplier - I : Static and Dynamic
EXAMINATION CORNER | Q 2. | Page 20.24
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