Question 29
National IncomeThe investment expenditure of an economy changes by ₦2 million and MPC is 0.75. The multiplier is
- A.8
- B.4
- C.3
- D.2
Show the answer and explanation
Answer: B (4)
Explanation
Multiplier = 1/(1 − MPC) = 1/0.25 = 4.
The investment expenditure of an economy changes by ₦2 million and MPC is 0.75. The multiplier is
Answer: B (4)
Multiplier = 1/(1 − MPC) = 1/0.25 = 4.