CUET CUET Economics 2024 - Value of MPS (Marginal Propensity to Save) is increased from 0.4 to 0.5. What would be the impact on Multiplier? | PYQs + Solutions | AfterBoards
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CUET Economics 2024

Economics
>
Income & Employment

Easy

Value of MPS (Marginal Propensity to Save) is increased from 0.4 to 0.5. What would be the impact on Multiplier?

Correct Option: 4
Multiplier is calculated -> inversely related to MPS. \newline
    \newline
  1. Option 1: Incorrect -> opposite happens.
    2. \newline
  2. Option 2: Incorrect -> change occurs.
    3. \newline
  3. Option 3: Incorrect -> enough information given.
    4. \newline
  4. Option 4: Correct -> decrease in multiplier size.

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