Refer to the information above. The multiplier for the above economy equals:

Name: Refer to the information above. The multiplier for the above economy equals:
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Question

Quizplus · Accepted Answer

The multiplier equals 1 / (1 - MPC) where MPC is the marginal propensity to consume. 
Here, MPC is given as 0.7. 
Hence, the multiplier is 1 / (1 - 0.7) = 1 / 0.3 = 3.33 (approx). 
Therefore, the closest choice to the multiplier is C) 2.86.

Refer to the Information Above