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How does the Keynesian multiplier relate to the marginal propensity to save?

1 Answer

Nallasivam V · Bio

Jan 24, 2016

$k = \frac{1}{1 - M P C} = \frac{1}{M P S}$ $k=1/(1-MPC)=1/(MPS)$

Explanation:

Keynesian Multiplier -

$k = \frac{1}{1 - M P C}$ $k = 1/(1 - MPC)$

$1 - M P C = M P S$ $1 - MPC = MPS$

Hence -

$k = \frac{1}{M P S}$ $k = 1/(MPS)$

Thus Keynesian Multiplier can be calculated using $M P S$ $MPS$

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