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1. If MPS = 0.2, then the multiplier = 2. If MPS = 0.5, then the multiplier = 3. If MPC =0.75, then the multiplier
1. If MPS = 0.2, then the multiplier = 2. If MPS = 0.5, then the multiplier = 3. If MPC =0.75, then the multiplier = 4. If consumption increases by $80 following an increase in income of $100, then we have an MPC of 5. If savings increases by $400 when income increases from $9,000 to $13,000. Then MPS = MPC = , and the multiplier would be 6. Use the table to answer the following questions: (Hint: it will be helpful to add columns for Saving and AE) INCOME C $1, 600 $1,340 $280 1,700 1,420 280 1,800 1,500 280 1,900 1,580 280 2,000 1,660 280 a. Equilibrium level of income is b. MPC= c. Multiplier =
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