Chapter 4 Part 2 - Income Determination and Multiplier
Savings and Investment Approach to Find equilibrium Point
Are Savings and Investment taken Ex Ante or Ex Post while calculating equilibrium Point
What is Full Employment, Under Employment and Over Full Employment
How to Determine equilibrium Output under Fixed Price Model
Investment Multiplier Meaning, Concept, Examples
Relation between Investment Multiplier K and MPC
Relation between Investment Multiplier k and MPS
What is Minimum and Maximum Value of Investment Multipler k? You are here
Questions on Consumption Function and equilibrium Level of Income
Questions on Savings Function and equilibrium Level of Income
How to Calculate National Income from MPC?
Chapter 4 Part 2 - Income Determination and Multiplier
Last updated at April 16, 2024 by Teachoo
In an economy, the entire increase in income is spent on consumption. What will
be the value of multiplies?
View AnswerIt is given that the entire increase in income is spent on consumption
it means,
MPC = 1
K = 1/ 1 - MPC
K = 1/ 1-1
K = 1/ 0
K = not defined
So, the value of multiplier is not defined
No questions in this part
What can be the maximum value of Multiplier?
View AnswerThe maximum value of multiplier can be infinity.
What is Maximum Value of K? Max Value of K is Infinity Explanation We know that 1- MPC MPC Can be maximum 1 (We can spend all of what we earn) 1- MPC Infinity What is Minimum Value of K? Min Value of K is 1 Explanation We know that 1- MPC MPC Can be Min 0 (We can spend 0 of what we earn) 1- MPC K 1
