Chapter10
THEMARGINALPROPENSITYTOCONSUME
ANDTHEMULTIPLIER
Weestablishedinchapter8thatemploymentcanonlyincreaseparipassuwithinvestmentunlessthereisachangeinthepropensitytoconsume。Wecannowcarrythislineofthoughtastagefurther。Foringivencircumstancesadefiniteratio，tobecalledthemultiplier，canbeestablishedbetweenincomeandinvestmentand，subjecttocertainsimplifications，betweenthetotalemploymentandtheemploymentdirectlyemployedoninvestmentwhichweshallcalltheprimaryemployment。
Thisfurtherstepisanintegralpartofourtheoryofemployment，sinceitestablishesapreciserelationship，giventhepropensitytoconsume，betweenaggregateemploymentandincomeandtherateofinvestment。TheconceptionofthemultiplierwasfirstintroducedintoeconomictheorybyMrR。F。Kahninhisarticleon\'TheRelationofHomeInvestmenttoUnemployment\'EconomicJournal，June1931。Hisargumentinthisarticledependedonthefundamentalnotionthat，ifthepropensitytoconsumeinvarioushypotheticalcircumstancesistogetherwithcertainotherconditions