The investment expenditure of an economy changes by N2 million and MPC is 0.75
The multiplier is
- 8
-
4
- 3
- 2
The correct answer is: B
Explanation
The Multiplier is calculated as ( 1 divided by 1 minus the MPC. That is;
Multiplier = 1 ÷ (1 - 0.75) = 0.25
1 ÷ 0.25 = 4