Home › Bihar Board Class 12 (Arts) › Economics › Determination of Income and Employment › If the MPC is 0.9, by what factor does autonomou…
If the MPC is 0.9, by what factor does autonomous spending get multiplied?
A9
B10
C0.9
D90
Answer & Solution
Correct answer: B. 10
With c = 0.9 the multiplier is 1/(1 - 0.9) = 10.
Related questions
With a government, which term simply adds to the autonomous part of demand?How does government spending G affect aggregate demand?With A = 50, MPS = 0.2 and Y = 4000 crore, what is ex ante aggregate demand?Equilibrium output also fixes which variable, given other factors of production?The effective demand principle assumes aggregate supply is what at the fixed price?Under the effective demand principle, what determines aggregate output?Excess demand in the economy leads to what in the long run?What does deficient demand lead to in the long run?