Question
Economics Question on Return on investment
Based on the following diagram answer the question:
Identify the correct statement from the following statements :
A
MPS and investment multiplier are directly related to each other
B
MPS and investment multiplier are inversely related to each other
C
MPC and investment multiplier are directly related to each other
D
MPC and MPS both have no relation with investment multiplier
Answer
MPS and investment multiplier are inversely related to each other
Explanation
Solution
The correct option is (B): MPS and investment multiplier are inversely related to each other