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Subjects

Economics

Investment multiplier

In Class 12 Economics, Investment Multiplier explains how a change in autonomous investment can cause a larger change in national income and employment within the framework of Determination of Income and Employment. Students learn the multiplier process through successive rounds of consumption and income generation, understand the relationship k = 1/(1 − MPC) or k = 1/MPS, and solve numerical problems using the marginal propensity to consume or save. The topic also highlights the assumptions and limitations of the simple multiplier model.

Hard · Level 1 · 1 questions

Practice questions

01The multiplier idea explains which macro relation?

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