![]() |
|
![]() | ||
|
Subject:
The multiplier
Category: Business and Money > Economics Asked by: skeeter1-ga List Price: $2.00 |
Posted:
08 May 2003 09:41 PDT
Expires: 07 Jun 2003 09:41 PDT Question ID: 201173 |
The multiplier can be calculated by dividing A. The initial change in spending the change in real GP b. the change in real GP by the initial change in spending c. One by one minus the marginal propensity to save d. one by one minus the marginal propensity to invest which is the correct answer? |
![]() | ||
|
Subject:
Re: The multiplier
Answered By: juggler-ga on 08 May 2003 10:07 PDT Rated: ![]() |
Hello. The correct answer is "b." "The value of the multiplier is equivalent to the change in real GDP divided by the change in desired spending which induces it. Mathematically the multiplier is the reciprocal of the marginal propensity to save or, what is by definition the same thing, one minus the marginal propensity to consume." source: "THE KEYNESIAN REVOLUTION," hosted by utoronta.ca http://www.chass.utoronto.ca/~reak/eco100/100_14.htm Note that "c" is on the right track with respect to the relationship between the multiplier and marginal propensity to save, but it contains a significant misstatement. The multplier is actually equal to 1/MPS rather than 1/1-MPS. search strategy: multiplier "change in real GDP", spending I hope this helps. |
skeeter1-ga
rated this answer:![]() |
![]() | ||
|
There are no comments at this time. |
If you feel that you have found inappropriate content, please let us know by emailing us at answers-support@google.com with the question ID listed above. Thank you. |
Search Google Answers for |
Google Home - Answers FAQ - Terms of Service - Privacy Policy |