Question

Calculate the values of multiplier if the MPS is:
(a) 0.40; (b) Equal to MPC

Answer 1

(a) If MPS = 0.40, then

Multiplier (k) = 1/MPS = 1/ 0.40 = 2.5

(b) If MPC= MPS, then

2 MPS= 1

=> MPS =1/2 =0.5

Multiplier (k) = 1/MPS = 1/ 0.5 = 2