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Exploring Economics

8th Edition
Robert L. Sexton
Publisher: SAGE Publications, Inc
ISBN: 9781544336329

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BuyFindarrow_forward

Exploring Economics

8th Edition
Robert L. Sexton
Publisher: SAGE Publications, Inc
ISBN: 9781544336329
Chapter 24, Problem 7P
Textbook Problem
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What would the multiplier be if the marginal propensity to consume was

a. 1/3?

b. 1/2?

c. 3/4?

To determine

(a)

To compute:

The value of multiplier if the marginal propensity to consume was 13.

Explanation of Solution

Given information:

Value of MPC is 13

The formula for multiplier is,

  Multiplier=11MPC

Substitute the value i

To determine

(b)

To compute:

The value of multiplier if the marginal propensity to consume was 12.

To determine

(c)

To compute:

The value of multiplier if the marginal propensity to consume was 34.

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