10 Views

Question : If the marginal propensity to consume is denoted by c, then the government expenditure multiplier can be expressed as _______.

Option 1: c

Option 2: 1/1-c

Option 3: 1/c

Option 4: -1/c


Team Careers360 25th Jan, 2024
Answer (1)
Team Careers360 26th Jan, 2024

Correct Answer: 1/1-c


Solution : The correct answer is 1/1-c.

The additional consumer spending that results from a rise in national income is known as the marginal propensity to consume (MPC). It is the extra spending brought on by an extra dollar in revenue. The multiplier is calculated as 1/(1 minus MPC).

SSC CGL Complete Guide

Candidates can download this ebook to know all about SSC CGL.

Download EBook

Know More About

Related Questions

Manipal Online M.Com Admissions
Apply
Apply for Online M.Com from Manipal University
View All Application Forms

Download the Careers360 App on your Android phone

Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile

150M+ Students
30,000+ Colleges
500+ Exams
1500+ E-books