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What is the v...

Question

What is the value of multiplier when Marginal Propensity to Save is zero?

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Solution

If MPS= 0, then MPC =1- MPS = 1- 0 = 1. So,
Multiplier(k) = 1/ (1-MPC)
= 1/(1-1)
= 1/0
= Infinity

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