Value of MPS (Marginal Propensity to Save) is increased from 0.4 to 0.5. What would be the impact on Multiplier? Option 1: The size of the multiplier would be increased. Option 2: The size of the multiplier would remain same. Option 3: Value of multiplier is undetermined with the given information. Option 4: The size of the multiplier would be decreased.

The answer is 'The size of the multiplier would be decreased.'. View full solution:

CUET Economics - Value of MPS (Marginal Propensity to Save) is increased from 0.4 to 0.5. What would be the impact on Multiplier? | PYQs + Solutions

CUET Economics

Macro

Easy

The size of the multiplier would be increased.

The size of the multiplier would remain same.

Value of multiplier is undetermined with the given information.

The size of the multiplier would be decreased.

✅ Correct Option: 4