Page 96 - Macroeconomics. book docx_Neat

A. Decrease

B. Increase

C. Stay the same

D. Become negative

Answer: B

Q10. The investment multiplier shows the relationship between investment and:

A. Interest rate
B. Inflation

C. National income

D. Saving

Answer: C

Q11. If MPC = 0.5, the value of the multiplier is:

A. 0.5
B. 1

C. 1.5

D. 2

Answer: D

Q12. The formula of the investment multiplier is:

A. 11−MPC\frac{1}{1 - MPC}1−MPC1

B. MPC+MPSMPC + MPSMPC+MPS

C. MPC−MPSMPC - MPSMPC−MPS
D. MPC×IncomeMPC × IncomeMPC×Income

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