if MPC is greater than MPS , value of multiplier will be ?

Dear Student,

if MPC is greater than MPS , value of multiplier will be Greater than 2 .

As, The value of multiplier is directly related to the Marginal Propensity to Consume i.e 1/(1 - MPC)

For example :  MPS + MPC = 1 
so, MPC > MPS
if, Value of MPC is 0.6 then multiplier will be 1/0.4
                                                                                             = (1 x 10)/4
                                                                                             = 2.5
this will be greater as MPC Increases.

Regards

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