If the multiplier is 5,then the MPC must be
A) 1/5.
B) 1/6.
C) 3/4.
D) 4/5.
E) 2/3.

Name: If the multiplier is 5,then the MPC must be A) 1/5. B) 1/6. C) 3/4. D) 4/5. E) 2/3.
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Question

Quizplus · Accepted Answer

The multiplier formula is 1/MPC, where MPC is the marginal propensity to consume. Therefore, if the multiplier is 5, then 1/MPC = 5. Solving for MPC, we get MPC = 4/5. Hence, the best choice is D.

If the Multiplier Is 5,then the MPC Must Be