Which one of the following saving functions corresponds to the investment multiplier of 5? |
S=-20+0.25 Y S=-40+0.75Y S=-60+0.20Y S=-75+0.60Y |
S=-60+0.20Y |
The correct answer is Option 3: S=-60+0.20Y From this formulae we can find out the value of MPS. Thus, MPS =\(\frac{1 }{ 5}\) = 0.2 |