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Standard XII
Economics
Income Method
Size of inves...
Question
Size of investment multiplier is given by the inverse of marginal propensity to save.
A
True
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B
False
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Solution
The correct option is
A
True
True.
The value of multiplier and MPS are inversely related as the multiplier is the reciprocal of MPS.
Multiplier(k) = 1/ MPS.
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