Commerce Exam > Commerce Videos > Economics Class 12 > The Multiplier Effect, MPC, and MPS
The Multiplier Effect, MPC, and MPS Video Lecture | Economics Class 12 - Commerce
|
86 videos|334 docs|54 tests
|
FAQs on The Multiplier Effect, MPC, and MPS Video Lecture - Economics Class 12 - Commerce
| 1. What is the Multiplier Effect in economics? |  |
Ans. The Multiplier Effect refers to the phenomenon where an initial increase in spending leads to a larger increase in national income and economic growth. This is because the increase in spending creates a ripple effect as the recipients of that spending also spend money, leading to a chain reaction of increased consumption and production.
| 2. How is the Multiplier Effect calculated? | |
Ans. The Multiplier Effect is calculated by dividing the change in national income by the initial change in spending that caused it. For example, if an increase in government spending leads to a $100 billion increase in national income, and the initial increase in spending was $20 billion, the multiplier would be 5 (100/20).
| 3. What is the Marginal Propensity to Consume (MPC)? | |
Ans. The Marginal Propensity to Consume (MPC) is the proportion of an increase in income that a consumer spends on consumption. For example, if a consumer's income increases by $100 and they spend $80 of it, their MPC would be 0.8 ($80/$100).
| 4. What is the Marginal Propensity to Save (MPS)? | |
Ans. The Marginal Propensity to Save (MPS) is the proportion of an increase in income that a consumer saves rather than spends on consumption. Using the example from the previous question, if a consumer's income increases by $100 and they save $20 of it, their MPS would be 0.2 ($20/$100).
| 5. How do the MPC and MPS relate to the Multiplier Effect? | |
Ans. The MPC and MPS are key components in determining the size of the Multiplier Effect. A higher MPC (consumers spending more of their income) leads to a larger multiplier, as more of the initial increase in spending is circulated through the economy. Conversely, a higher MPS (consumers saving more of their income) leads to a smaller multiplier, as less of the initial increase in spending is circulated.
Related Exams
About this Video
|
Oct 24, 2024 Last updated |
Video Description: The Multiplier Effect, MPC, and MPS for Commerce 2024 is part of Economics Class 12 preparation.
The notes and questions for The Multiplier Effect, MPC, and MPS have been prepared according to the Commerce exam syllabus.
Information about The Multiplier Effect, MPC, and MPS covers all important topics for Commerce 2024 Exam.
Find important definitions, questions, notes, meanings, examples, exercises and tests below for The Multiplier Effect, MPC, and MPS.
Introduction of The Multiplier Effect, MPC, and MPS in English is available as part of our Economics Class 12 for Commerce & The Multiplier Effect, MPC, and MPS in
Hindi for Economics Class 12 course. Download more important topics related with notes, lectures and mock test series for
Commerce Exam by signing up for free.
Description
Video Lecture & Questions for The Multiplier Effect, MPC, and MPS Video Lecture | Economics Class 12 - Commerce - Commerce full syllabus preparation | Free video for Commerce exam to prepare for Economics Class 12.
Information about The Multiplier Effect, MPC, and MPS
Here you can find the meaning of The Multiplier Effect, MPC, and MPS defined & explained in the simplest way possible.
Besides explaining types of The Multiplier Effect, MPC, and MPS theory, EduRev gives you an ample number of questions to practice The Multiplier Effect, MPC, and MPS tests,
examples and also practice Commerce tests.
|
86 videos|334 docs|54 tests
|
|
Explore Courses for Commerce exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
Related Searches
Extra Questions
,video lectures
,MPC
,Free
,The Multiplier Effect
,practice quizzes
,MPC
,and MPS Video Lecture | Economics Class 12 - Commerce
,Important questions
,past year papers
,MCQs
,Previous Year Questions with Solutions
,Summary
,ppt
,and MPS Video Lecture | Economics Class 12 - Commerce
,MPC
,Sample Paper
,study material
,and MPS Video Lecture | Economics Class 12 - Commerce
,Viva Questions
,Semester Notes
,Objective type Questions
,shortcuts and tricks
,mock tests for examination
,Exam
,The Multiplier Effect
,The Multiplier Effect
;
Study The Multiplier Effect, MPC, and MPS on the App
Students of Commerce can study The Multiplier Effect, MPC, and MPS alongwith tests & analysis from the EduRev app,
which will help them while preparing for their exam. Apart from the The Multiplier Effect, MPC, and MPS,
students can also utilize the EduRev App for other study materials such as previous year question papers, syllabus, important questions, etc.
The EduRev App will make your learning easier as you can access it from anywhere you want.
The content of The Multiplier Effect, MPC, and MPS is prepared as per the latest Commerce syllabus.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup