Share

# If Mpc = 0, the Value of the Multiplier Is: (Choose the Correct Alternative) - CBSE (Arts) Class 12 - Economics

ConceptInvestment Multiplier and Its Mechanism

#### Question

If MPC = 0, the value of the multiplier is: (Choose the correct alternative)

a. 0
b. 1
c. Between 0 and 1
d. Infinity

#### Solution

1

We know that

Multiplier (k) = 1/(1- MPC) = 1/(1- c)

= 1/(1- 0) = 1

Is there an error in this question or solution?

#### APPEARS IN

Solution If Mpc = 0, the Value of the Multiplier Is: (Choose the Correct Alternative) Concept: Investment Multiplier and Its Mechanism.
S