If $k=\frac{1}{1-c}$ and

K = Investment Multiplier, then c is

Marginal Propensity to Consume

The correct answer is Option 2: Marginal Propensity to Consume

c= Marginal Propensity to Consume

The investment multiplier is a key concept in Keynesian economics, according to which, an increase in public or private investments will cause a country’s GDP to increase by a value more than the original investment amount. Such investments can be made through private consumption spending or government spending in the economy.

K = 1 / (1 - MPC).