1. What is the multipliereffect?
2. What relationship does theMPC bear to the size of the multiplier and the MPS?
3. What will the multiplier bewhen the MPS is 0.4, 0.6, 1, ½ and 0?
4. How much of a change in theeconomy will result if businesses increase their level ofinvestment by $8 Billion and the MPC in the economy is 4/5 and ifit is 2/3