The concept of 'Multiplier' in Keynesian economics is larger when: MCQ with Answer and Explanation

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The concept of 'Multiplier' in Keynesian economics is larger when:

A. Marginal propensity to save is higher

B. Marginal propensity to consume is lower

C. Tax rate is higher

D. Marginal propensity to consume is higher

Answer: Option D

Solution (By JKSSB Mock Tests)

The investment multiplier = 1/(1−MPC). A higher marginal propensity to consume leads to a larger multiplier effect on income.

This question belongs to: Economy GK Economy Set 1

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Correct Answer: Option C

Explanation:
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Correct Answer: Option B

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Correct Answer: Option C

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This question belongs to: Economy GK Economy Set 1

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