Question
If income increases from 3,000 to 4,000, and autonomous investment increases by 200, the MPC should be
Answer: Option B
:
B
Multiplier (M) = ΔYΔA
= (4000−3000)200
= 5
MPS = 1M = 0.2
Therefore, MPC = 1 - MPS = 0.8
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:
B
Multiplier (M) = ΔYΔA
= (4000−3000)200
= 5
MPS = 1M = 0.2
Therefore, MPC = 1 - MPS = 0.8
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