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18 In a closed economy with no government, the level of investment is $5 million, the equilibrium
level of income is $22 million, the full employment level of income is $25 million and there is a
deflationary gap of $1 million.
What can be deduced from this information?
A The marginal propensity to consume is 2/3
B The marginal propensity to consume is 1/3
C The value of the investment multiplier is 5.
D The value of the investment multiplier is 1.5.
the answer is a
As salaam alaikum
Sir Qamar Baloch Please explain the answer to this question.