Determination of Income and Employment — Economics STD 12 Humanities & Commerce — Question

1. If we put maximum value of MPC, i.e., 1, we get maximum value of multiplier, i.e., $\infty.$
2. As against it, if we put minimum value of MPC, i.e., 0, we get the minimum value of multiplier, i.e. 1.
3. So, positive relationship exists between MPC and multiplier. It means when MPC increases, the multiplier also increases and vice-versa.

$\text{MPC}\uparrow\rightarrow\uparrow$