How does the Keynesian multiplier relate to the marginal propensity to save?
1 Answer
Nallasivam V
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Jan 24, 2016
k=1/(1-MPC)=1/(MPS)
Explanation:
Keynesian Multiplier -
k = 1/(1 - MPC)
1 - MPC = MPS
Hence -
k = 1/(MPS)
Thus Keynesian Multiplier can be calculated using