If the Value of the Multiplier in a Closed Economy

question 99

Multiple Choice

If the value of the multiplier in a closed economy with no government sector is equal to 5, then which of the following is true?

• A) The level of output of goods and services in the economy will equal 100.
• B) The marginal propensity to consume in the economy will be equal to 0.4.
• C) The level of investment in the economy will be equal to 400.
• D) The marginal propensity to save in the economy will be equal to 0.2.

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Aristotle

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