Given that the marginal propensity to consume (MPC) is 0.75, what is the corresponding multiplier value?
Explanation
The multiplier is calculated as 1 divided by (1 minus MPC). Here, it equals 1 / (1 - 0.75) = 4.
The multiplier is calculated as 1 divided by (1 minus MPC). Here, it equals 1 / (1 - 0.75) = 4.