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# Multiplier Question

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Why bother with a post grad? Are they even worth it? Have your say! 26-10-2016
1. can someone explain this for me? I figured MPS = 0.125 (5000/40000), and therefore ME = 8 (1/0.125) but the mark scheme states the answer as 4.

3a) An injection of £10,000 into the economy eventually leads to £5,000 in extra saving,£35,000 of extra consumption and £40,000 of extra income. Therefore the multiplier can becalculated as

A. 8
B. 0.5
C. 4
D. 3.5

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Updated: May 18, 2016
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