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Question
If MPC and MPS are equal, what is the value of the multiplier?
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Solution
If MPC= MPS, thenMPC+MPS= 1 =>2 MPS= 1 => MPS =1/2 =0.5 Multiplier (k) = 1/MPS = 1/ 0.5 = 2
If MPC= MPS, then
MPC+MPS= 1
=>2 MPS= 1
=> MPS =1/2 =0.5
Multiplier (k) = 1/MPS = 1/ 0.5 = 2
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