Refer to the information below.The multiplier in this economy is:
A) 4
B) 5
C) 1.5.
D) 3

Name: Refer to the information below.The multiplier in this economy is: A) 4 B) 5 C) 1.5. D) 3
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Question

Refer to the information below.The multiplier in this economy is: 
A) 4 
B) 5 
C) 1.5. 
D) 3

Quizplus · Accepted Answer

The multiplier in an economy is calculated by using the formula 1/MPC (Marginal Propensity to Consume). Looking at the information provided, the MPC is 0.33 which means the multiplier is 1/0.33 = 3. Therefore, the best choice is D.

Refer to the Information Below