Question : Which of the following statemenst are true?
- If MPC and MPS are equal, the value of multiplier is 2.
- If investment multiplier is 1, the value of MPC is zero.
Option 1: Both are true.
Option 2: Both are false.
Option 3:
Statement 1 is true, statement 2 is false.
Option 4: Statement 1 is false, statement 2 is true.
Answer (1)
13th Jan, 2024
Correct Answer:
Both are true.
Solution :
MPC+MPS=1
MPC= 0.5, MPS= 0.5
Multiplier = 2.
If MPC=0, K=1.
Hence, Option A is correct.
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