Answer:
In economics a multiplier is the factor by which gains in total output are greater than the change in spending that caused it. It is usually used in reference to the relationship between investment and total national income. Relationship between marginal propensity to consume and multiplier There is a direct relationship between MPC and Multiplier as, the higher the MPC, the higher the multiplier and vice versa. \[\Rightarrow \] \[\text{Multiplier}=\frac{1}{1-MPC}\] \[\Rightarrow \] \[4=\frac{1}{1-MPC}\] \[\Rightarrow \] MPC = 0.75 \[\therefore \] MPC = 0.75
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