The multiplier is equal to Multiple Choice Ο 1- Marginal propensity to save Ο Marginal propensity...

Question

Question

Answer 1

Answer #1

Multiplier is change in output due to change in autonomous variable.

Multiplier = 1 ÷ ( 1 - marginal propensity to consume ) = 1 ÷ ( 1 - c )

We know, marginal propensity to save = s = 1 - c

So, multiplier = 1 ÷ ( 1 - c ) = 1 ÷ s = 1/s

Answer 2

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