Question

What can be the maximum and minimum value of multiplier? Prove your answer.

Answer 1

Maximum and minimum value of multiplier is infinity and one respectively.
It can be proved as follows:
The maximum value of MPC is 1 because of the psychological law of consumption.
So, the multiplier $=\frac{1}{1-MPC}=\frac{1}{1-1}=\frac{1}{0}=\infty$

If minimum value of MPC is zero,

The multiplier = $\frac{1}{1-MPC}=\frac{1}{1-0}=\frac{1}{1}=1$