Home
Class 12
ECONOMICS
If the ration of marginal propensity to ...

If the ration of marginal propensity to consume and marginal propensity to save is 4:1, the value of investment multiplier will be 4

Text Solution

Verified by Experts

Ration of 4:1 between marginal propensity to consume(MPC) and marginal propensity to save (MPC) signifies `MPC=(4)/(5)` or 0.8 and `MPS=(1)/(4)` or 0.2
Investment Multiplier(k)=`(1)/(MPS) =(1)/(0.2)` =5
Doubtnut Promotions Banner Mobile Dark
|

Topper's Solved these Questions

  • INCOME DETERMINATION AND MULTIPLIER

    SANDEEP GARG|Exercise SHORT TYPE|11 Videos
  • INCOME DETERMINATION AND MULTIPLIER

    SANDEEP GARG|Exercise LONG|12 Videos
  • INCOME DETERMINATION AND MULTIPLIER

    SANDEEP GARG|Exercise HOTS HIGHER ORDER THINKING SKILLS QUESTION|14 Videos
  • GOVERNMENT BUDGET AND THE ECONOMY

    SANDEEP GARG|Exercise Unsolved Practicals|8 Videos
  • MEASUREMENT OF NATIONAL INCOME

    SANDEEP GARG|Exercise Miscellaneous Practicals|16 Videos

Similar Questions

Explore conceptually related problems

Define marginal propensity to consume.

Define marginal propensity to consume.

Define marginal propensity to consume.

Define marginal propensity to consume.

Define marginal propensity to save.

When marginal propensity to consume is greater then marginal propensity to save, the value of investment multiplier will greater than 5

When marginal propensity to consume is zero, the value of investment multiplier will also be zero.

If the marginal propensity to consume is greater than marginal propensity to save, the value of the multiplier will be (Choose the correct alternative) (a) greater than 2 (b) less than 2 (c) equal to 2 (d) equal to 5

define marginal propensity to consume (MPC).

If the marginal propensity of consume is greater than marginal propensity to save, the value of the multiplier will be (choose the correct alternative).