If the Multiplier Is 6, What Is the MPC

question 41

Multiple Choice

If the multiplier is 6, what is the MPC?

• A)1/6
• B)1/2
• C)4/5
• D)5/6

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Definitions:

Investment Turnover

A measure of a company's efficiency in using its assets to generate sales or revenue; calculated by dividing sales by the average invested assets.

Profit Margin

A financial ratio that measures the percentage of profit a company makes for each dollar of sales.

Return on Investment

A measure evaluating the efficiency or profitability of an investment, calculated as net profit divided by the cost of the investment.

Residual Income

The income that remains after all required costs of capital and operating expenses have been paid.