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Concepts of Multiplier, Macroeconomics Video Lecture | Macro Economics - B Com
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FAQs on Concepts of Multiplier, Macroeconomics Video Lecture - Macro Economics - B Com
| 1. What is the multiplier in macroeconomics? |  |
Ans. The multiplier in macroeconomics refers to the concept that a change in one economic variable can result in a greater change in another variable. It measures the overall impact of a change in aggregate demand on the economy. For example, if there is an increase in government spending, the multiplier effect suggests that it will lead to a larger increase in national income.
| 2. How is the multiplier calculated? | |
Ans. The multiplier is calculated using the formula: multiplier = 1 / (1 - marginal propensity to consume). The marginal propensity to consume (MPC) represents the proportion of additional income that is spent rather than saved. By calculating the MPC and plugging it into the formula, we can determine the multiplier's value. For example, if the MPC is 0.8, the multiplier would be 1 / (1 - 0.8) = 5.
| 3. What factors influence the size of the multiplier? | |
Ans. The size of the multiplier depends on several factors. Firstly, the marginal propensity to consume (MPC) plays a crucial role. A higher MPC leads to a larger multiplier. Secondly, the presence of leakages or injections in the economy affects the multiplier. Leakages, such as saving or imports, reduce the multiplier, while injections, such as investment or exports, increase it. Lastly, the multiplier is also influenced by the size of the government spending or tax changes. Higher government spending or lower taxes tend to have larger multiplier effects.
| 4. How does the multiplier affect economic growth? | |
Ans. The multiplier has a significant impact on economic growth. When the multiplier is greater than one, an initial increase in aggregate demand leads to a larger increase in national income. This can result in a positive feedback loop, where increased income leads to increased consumption and investment, further boosting economic growth. On the other hand, if the multiplier is less than one, the impact of changes in aggregate demand on economic growth will be smaller.
| 5. Can the multiplier have negative effects on the economy? | |
Ans. In certain situations, the multiplier can have negative effects on the economy. For example, if the economy is already operating at full capacity, an increase in aggregate demand may lead to inflationary pressures. Additionally, if the government finances increased spending through borrowing, it can lead to higher interest rates, which can negatively impact investment and consumption. Therefore, while the multiplier can be a powerful tool for stimulating economic growth, it needs to be carefully managed to avoid potential negative consequences.
Text Transcript from Video
in this video we will be started about
the imported liar the concept of multi
file we did in a previous video that how
your income is increased doubles are
more than due to your injections
underdrawers
due to your safety limit investment if
you are selling more you're right
which means your ISM decreases more than
what was the drive from the economy and
if you are injecting which means you're
increasingly investment you are
increasing the injections recent
expansion due to which your output will
be more and if you output will be more
which means that your income will be
more and income is much more than what
you in wait so this we have grant deed
multiplier effect of injection
withdrawal also helped in this video in
this video we will be studying about the
multiplier so we have seen that how
additional aggressive cognition output
and then additional output causes the
additional income at the economy the
increase in income is many water and
sending reason investment the factor by
which output are tube increases because
of increase in investment is for
investment multiplier so what does now
multiplier the factor by which
output or income increases because of
increase in investment is cause
investment
magneton so we can also write it as it
is the ratio between increase output or
anything and increase in invest
right so k is equal to your change in
income due to the changes in risk where
you get the note multiplier your change
in Y is your change in income change in
I is your change in invest right so I
hope you have understood that what your
multiplier is how you calculate your
multiplier and if I am talking about the
multiplier and talking about your in
management or output multiplier the mood
Rd saving this is a total investment
increases your output output increases
dirty so this is all we say investment
output our income multiplier this is the
question if investment increases by and
p50 sorrow which means that change in I
it should be 16 sir and as a consequence
income increases buyers will be 64
seismic changes income degrees 60 so the
can greatly multiply we have before ma
that you're multiplying equal to change
in Y on the change in investment that is
your 16 divided by 16 which is you 4 so
it implies that an increase in
increments for time send increasing
investment right so accordingly of
multipliers for times
but in the incoming this is for time
then then increases investment to this
is your multiplier I hope you have some
CPR distresses these download college
logic I enjoyed learning experience with
us
the imported liar the concept of multi
file we did in a previous video that how
your income is increased doubles are
more than due to your injections
underdrawers
due to your safety limit investment if
you are selling more you're right
which means your ISM decreases more than
what was the drive from the economy and
if you are injecting which means you're
increasingly investment you are
increasing the injections recent
expansion due to which your output will
be more and if you output will be more
which means that your income will be
more and income is much more than what
you in wait so this we have grant deed
multiplier effect of injection
withdrawal also helped in this video in
this video we will be studying about the
multiplier so we have seen that how
additional aggressive cognition output
and then additional output causes the
additional income at the economy the
increase in income is many water and
sending reason investment the factor by
which output are tube increases because
of increase in investment is for
investment multiplier so what does now
multiplier the factor by which
output or income increases because of
increase in investment is cause
investment
magneton so we can also write it as it
is the ratio between increase output or
anything and increase in invest
right so k is equal to your change in
income due to the changes in risk where
you get the note multiplier your change
in Y is your change in income change in
I is your change in invest right so I
hope you have understood that what your
multiplier is how you calculate your
multiplier and if I am talking about the
multiplier and talking about your in
management or output multiplier the mood
Rd saving this is a total investment
increases your output output increases
dirty so this is all we say investment
output our income multiplier this is the
question if investment increases by and
p50 sorrow which means that change in I
it should be 16 sir and as a consequence
income increases buyers will be 64
seismic changes income degrees 60 so the
can greatly multiply we have before ma
that you're multiplying equal to change
in Y on the change in investment that is
your 16 divided by 16 which is you 4 so
it implies that an increase in
increments for time send increasing
investment right so accordingly of
multipliers for times
but in the incoming this is for time
then then increases investment to this
is your multiplier I hope you have some
CPR distresses these download college
logic I enjoyed learning experience with
us
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Dec 16, 2024 Last updated |
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