What will be the value of investment multiplier if, MPS is equal to zero?
Answer & explanation
Correct answer: option 3
The correct answer is Option 3: ∞
Investment multiplier:
k= \(\frac{ 1}{ \text 1 - MPC}\) OR
k= \(\frac{ 1}{ MPS}\)
k= \(\frac{ 1}{0 }\)
k= ∞