Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Determination of Income and Employment

Question:
What will be the correct option which fits best in the below statement?

Investment Multiplier will be high when _________
Options:
MPC is high
MPC is low
MPC is 0.5
None of these
Correct Answer:
MPC is high
Explanation:
There is a direct relation in MPC and Investment Multiplier. That means when MPC increases Investment Multiplier also increases and vice-versa.