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Ex Ante Consumption

There is an I...

Question

There is an Inverse relationship between the value of marginal propensity to save and investment multiplier.

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 multiplier is the reciprocal of MPS.
Multiplier(k) = 1/ MPS.

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