In a closed economy with no government sector, the marginal propensity to save (MPS) is 0.25. Therefore, the value of the multiplier will be equal to _____.

Name: In a closed economy with no government sector, the marginal propensity to save (MPS) is 0.25. Therefore, the value of the multiplier will be equal to _____.
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Quizplus · Accepted Answer

The multiplier is calculated as 1/(1-MPC), where MPC (marginal propensity to consume) is 1 - MPS. Given MPS is 0.25, MPC is 0.75. Thus, the multiplier is 1/(1-0.75) = 1/0.25 = 4.

In a Closed Economy with No Government Sector, the Marginal