If MPC and MPS are equal, then the value of multiplier is : Option 1: 1 Option 2: 3 Option 3: 4 Option 4: 2

Answer: 2. Solution: MPC + MPS = 1. If MPC = MPS, then 2 x MPC = 1, so MPC = 0.5. Multiplier K = 1/(1 - MPC) = 1/(1 - 0.5) = 1/0.5 = 2. Hence the value of multiplier is 2.

Macro

Income & Employment

Easy

If MPC and MPS are equal, then the value of multiplier is :

✅ Correct Option: 4

MPC + MPS = 1. If MPC = MPS, then 2 x MPC = 1, so MPC = 0.5.

Multiplier K = $\frac{1}{1 - MPC}$ = $\frac{1}{1 - 0.5}$ = $\frac{1}{0.5}$ = 2.

Hence the value of multiplier is 2.

2025: 2 June Shift 1

__________ refers to that level of aggregate demand, which can be met by the corresponding supply in the economy.

2026: 11 May Shift 2

Match the LIST-I with LIST-II

LIST-I	LIST-II
A. Marginal Propensity to Save (MPS)	I. Consumption per unit of income.
B. Average Propensity to Save (APS)	II. Savings per unit of income.
C. Marginal Propensity to Consume (MPC)	III. Change in consumption per unit change in income.
D. Average Propensity to Consume (APC)	IV. Change in savings per unit change in income.

Choose the correct answer from the options given below:

2025: 3 June Shift 2

The study of macroeconomics usually simplifies the analysis of how the country's total ouput and the level of employment are related to.

2025: 29 May Shift 1

Among the following identify the condition where firms face unplanned de-cumulation of inventories.

2024: 16 May

It is market where economic agents freely exchange their own goods:

2022: 15 July Shift 2

A producer plans to add Rs.200 worth of goods to her stock by the end of the year. However due to an unexpected fall in the demand for her goods she adds Rs.250 worth of goods. Her ex-ante investment was____ and ex post investment was____

If MPC and MPS are equal, then the value of multiplier is :

Solution

Related questions:

Keyboard Shortcuts

CUET Economics Past Year Questions (Topic-Wise)