What would the multiplier be if the marginal propensity to consume was a. 1/3? b. 1/2? c. 3/4? | bartleby

Exploring Economics

8th Edition

Robert L. Sexton

Publisher: SAGE Publications, Inc

ISBN: 9781544336329

Solutions

Chapter

Section

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=11−MPC

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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