There is a direct relationship between MPC and value of investment multiplier.

Question

Options:

A . True

B . False

C . 0.3

D . 0.4

Answer: Option A
:
A
True, there is a direct relationship between MPC and value of investment multiplier. Higher the value of MPC, higher the investment multiplier and vice cersa. Because,

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

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