If MPC increases, the value of multiplier will

Increase

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Decrease

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Remains constant

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Increase as much as the increase in MPC

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Solution

The correct option is A
Increase

If MPC increases, the value of multiplier will increase.

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Similar questions

If MPC = 0.75, how much additional investment is required to increase income by Rs. 600? Find the multiplier.

(a) Complete the following table.

$\begin{matrix} MPC & MPS & Multiplier 0 & - & - - & 0.5 & - - & - & 4 \end{matrix}$

(b) Why rise in MPC leads to increase in Multiplier?

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