Calculate the value of the multiplier given the marginal propensity to consume (MPC) is 0.75.

B. 4 Step 1: Recall the formula for the multiplier. The multiplier is calculated using the marginal propensity to consume (MPC) with the formula: Multiplier = 11 − MPC Step 2: Substitute the given value of MPC into the formula. Given MPC = 0.75. Multiplier = (1)/(1 − 0.75) Step 3: Calculate the value. Multiplier = 1/0.25; Multiplier = 4 The final answer is B.

Calculate the value of the multiplier given the marginal propensity to consume (MPC) is 0.75.

B. 4 Step 1: Recall the formula for the multiplier. The multiplier is calculated using the marginal propensity to consume (MPC) with the formula: Multiplier = 11 − MPC Step 2: Substitute the given value of MPC into the formula. Given MPC = 0.75. Multiplier = (1)/(1 − 0.75) Step 3: Calculate the value. Multiplier = 1/0.25; Multiplier = 4 The final answer is B.

Solved: Calculate the value of the multiplier given the…

B. 4

Recall the formula for the multiplier.
The multiplier is calculated using the marginal propensity to consume (MPC) with the formula:
$\text{Multiplier} = \frac{1}{1 - \text{MPC}}$
Substitute the given value of MPC into the formula.
Given MPC $= 0.75$ .
$\text{Multiplier} = \frac{1}{1 - 0.75}$
Calculate the value.
$\text{Multiplier} = \frac{1}{0.25}$ $\text{Multiplier} = 4$
The final answer is $\text{B}$ .

Calculate the value of the multiplier given the marginal propensity to consume (MPC) is 0.75.

Answer

Step-by-step solution

Recall the formula for the multiplier.

Substitute the given value of MPC into the formula.

Calculate the value.

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