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The value of marginal propensity to cons...

The value of marginal propensity to consume is double the value of marginal propensity to save. Find the value of multiplier.

Text Solution

Verified by Experts

Ratio of MPC and MPS is 2:1
So, MPC is `(2)/(3)`and MPC is `(1)/(3)`
Multiplier `=(1)/(MPS)=(1)/((1)/(3))=3Or(1)/(1-MPC)=(1)/(1-2/3)=3`
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