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    Question

    When Keynesian multiplier K = 1, then MPC =

    ?
    A MPC > 0 Correct Answer Incorrect Answer
    B MPC < 1 Correct Answer Incorrect Answer
    C MPC = 1 Correct Answer Incorrect Answer
    D MPC = 0 Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    Investment Multiplier (K) = 1/ (1-MPC)                         If,       K = 1 Then, 1 = 1/ (1-MPC)           1 – MPC = 1 Or,      MPC = 0

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