If the marginal propensity to consume is 0.30 , what is the multiplier, assuming there are no taxes or imports

Multiplier or k = 1.428571429 rounded off to 1.43

Explanation:

A change in consumer income leading to an increased consumer spending based on the Marginal propensity to consume or MPC can have a much larger effect in the economy due to the multiplier. A multiplier is the is the amount of new income that is generated form an addition of extra income.

The marginal propensity to consume or MPC is the percentage of the additional income that will be used for consumption spending. The formula to calculate the multiplier, also denoted as k, is:

k = 1 / (1 - MPC)

k = 1 / (1 - 0.3)

k = 1.428571429 rounded off to 1.43