What will be the value of multiplier if 60% increase in income is consumed?

2.5 1.5 5 8

2.5

The formulae for Keynesian Investment Multiplier is: k = \(\frac{1 }{\text 1 - MPC }\) If 60% of increase in income is consumed then MPC can be written as 0.6 So,  k = \(\frac{1 }{\text 1 - 0.6}\) k = \(\frac{1 }{\text 0.4}\) k = \(\frac{10 }{\text 4}\) k = 2.5