Option 1 -> If MPS=1, then k=1/1=0 is incorrect calculation.
Option 2 -> If entire additional income is saved, MPS=1 and MPC=0, so k=1/MPS=1/1=1.
Option 3 -> Multiplier is more than 1 only when MPC>0, which is not the case here.
Option 4 -> Multiplier is infinite only when MPS=0 (all income consumed), opposite scenario.
Hence, Option 2: 1 -> The investment multiplier formula is k = 1/(1-MPC) or k = 1/MPS. When the entire additional income is saved, MPS (Marginal Propensity to Save) = 1 and MPC (Marginal Propensity to Consume) = 0. Substituting in the formula: k = 1/1 = 1. This means there is no multiplier effect because none of the additional income is spent on consumption, so no secondary rounds of income generation occur. The initial injection creates income only once with no ripple effect through the economy. -> correct