The multiplier can be calculated as
A) 1/(MPS + MPC).
B) MPC/MPS.
C) 1/(1 − MPC).
D) 1 − MPC = MPS.

Name: The multiplier can be calculated as A) 1/(MPS + MPC). B) MPC/MPS. C) 1/(1 − MPC). D) 1 − MPC = MPS.
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Question

Quizplus · Accepted Answer

The multiplier can be calculated as 1/(1 − MPC), where MPC stands for the marginal propensity to consume. This formula is derived from the Keynesian economic theory, indicating how an initial change in spending leads to a larger change in national income.

The Multiplier Can Be Calculated as