Find MPC when investment multiplier = 1. Options: A . &nbsp1.2 B . &nbsp1 C . &nbsp0 D . &nbsp1.5

Answer: Option C : C M(multiplier) = 1 1 − M P C Given that, 1 1 − M P C = 1 ⇒ 1 = 1 − M P C ⇒ MPC = 1 - 1 = 0 Thus, when M = 1, MPC = 0.

Find MPC when investment multiplier = 1.

Question

Find MPC when investment multiplier = 1.

Options:

A . 1.2

B . 1

C . 0

D . 1.5

Answer: Option C
:
C
M(multiplier)

= \frac{1}{1 - M P C}

Given that,

\frac{1}{1 - M P C} = 1 \Rightarrow 1 = 1 - M P C

\Rightarrow

MPC = 1 - 1 = 0
Thus, when M = 1, MPC = 0.

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