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    Question

    What is the investment multiplier when the marginal

    propensity to consume is 0.60 and the marginal propensity to import is 0.10?
    A 2 Correct Answer Incorrect Answer
    B 3 Correct Answer Incorrect Answer
    C 4 Correct Answer Incorrect Answer
    D 5 Correct Answer Incorrect Answer
    E 6 Correct Answer Incorrect Answer

    Solution

    Multiplier = 1/(1-c+m) = 1/(1-0.6+0.1) = 2.

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