To calculate the marginal propensity to consume (MPC) and the multiplier, we can use the following formulas:
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Marginal Propensity to Consume (MPC): \[ \text{MPC} = \frac{\Delta C}{\Delta Y} \] Where \(\Delta C\) is the change in consumption and \(\Delta Y\) is the change in income.
Here, \(\Delta C = 800\) and \(\Delta Y = 1000\). Therefore: \[ \text{MPC} = \frac{800}{1000} = 0.8 \]
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Multiplier (k): \[ k = \frac{1}{1 - \text{MPC}} \] Substituting the calculated MPC into the formula: \[ k = \frac{1}{1 - 0.8} = \frac{1}{0.2} = 5 \]
Based on these calculations, the marginal propensity to consume is 0.8 and the multiplier is 5.
Thus, the correct answer is:
d. 0.8 and the multiplier is 5.