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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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