Multipliers will be lower with which one of the following?
[amp_mcq option1=”High marginal propensity to consume” option2=”Low marginal propensity to consume” option3=”High marginal propensity to invest” option4=”Low marginal propensity to save” correct=”option2″]
This question was previously asked in
UPSC CAPF – 2018
– If MPC is high, (1 – MPC) is low, and the multiplier (1 / (1 – MPC)) is high.
– If MPC is low, (1 – MPC) is high, and the multiplier (1 / (1 – MPC)) is low.
Therefore, multipliers will be lower with a low marginal propensity to consume.