# when mpc is greater than mps, the value of investment multiplier will be greater than 5. True or false, with reason

The above statement is false. This is because MPC + MPS = 1.

Now, as MPC > MPS. Let us assume that MPC = 0.7 and MPS = 0.3.

Thus, $k=\frac{1}{1-MPC}=\frac{1}{1-0.7}=3.33<5$

Therefore, the above statement is false.

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