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    Question

    The value of expenditure multiplier when

    marginal propensity to save is 0.4 is
    A 2.5 Correct Answer Incorrect Answer
    B 9.2 Correct Answer Incorrect Answer
    C 3.5 Correct Answer Incorrect Answer
    D 4 Correct Answer Incorrect Answer

    Solution

    Multiplier = 1/MPS = 1/0.4 = 2.5

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