If the Multiplier Is 3

question 339

Multiple Choice

If the multiplier is 3.33 and there are no imports or income taxes, then the

• A) MPC is 0.7.
• B) MPS is 0.3.
• C) Both of the above answers are correct.
• D) None of the above answers are correct.

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Definitions:

Compounded Semi-annually

The process of adding interest to the principal sum of a deposit or loan every six months, so that each subsequent interest calculation is based on the original principal plus all accumulated interest.

Ordinary Annuity

A series of equal payments made at equal intervals of time, with the first payment occurring at the end of the period.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return.

Compounded Quarterly

The method of calculating interest where the interest is added to the principal sum four times a year.