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| What will be the value of multiplier if entire additional income is converted into additional consumption? |
0 1 infinite finite |
| infinite |
| k= \(\frac{ 1}{ \text 1 - MPC}\) If the person is consuming the entire increase in income that means his MPC = 1 Thus, k= \(\frac{1 }{\text 1 - 1 }\) = \(\frac{1 }{0 }\) which is equal to infinite. |
