Question

In a model with no government or foreign sector, if saving is defined as

S = - 200 + (0.2)Y , then, what is the number for the multiplier for the model?

Answer 1

$MPS=0.1\\ MPS\space is\space the\space slope\space of\space savings\space curve\\ Multiplier=\frac{1}{MPS}\\ Multiplier=\frac{1}{0.1}\\ Multiplier=10$