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.

Question

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.

Team Careers360 · Accepted Answer

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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Question : Which of the following statement are true?

The minimum value of multiplier can be zero and the maximum value of multiplier can be infinity.

Multiplier is a forward-looking function. Increase in income by a number of times due to a single increase in

Question : Which of the following are true?

Gross investment can be equal to net investment.

In final goods, no value is to be added.

Question : Which of the following statement are true?

When consumption function is C=40+0.8Y, savings will be equal to -40 at zero level of income.

As per above consumption function, MPS= 0.2

Question : Which of the following statement are true?

MPC of developing countries is more than MPC of developed countries.

There is an inverse relationship between ROI and volume of investment.

Question : Which of the following statement are true?

In a two sector economy, if consumption is equal to income, average propensity to save will be zero.

In a two sector economy if income is zero consumption will also be zero.