Fincl the value of multipliers given (i) Marginal Propensity to Consume = 1 and (ii) Marginal Propensity to Save = 1.
Fincl the value of multipliers given (i) Marginal Propensity to Consume = 1 and (ii) Marginal Propensity to Save = 1.
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(i) Here, MPC = 1
Hence, Multiplier(K) = 1/(1 - MPC) = 1/1 - 1 = ∞
So, Multiplier = ∞(infinity)
(ii) Here, MPS = 1
Now, K = 1/MPS = 1/1
Hence, Multiplier(K) = 1
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