Option 1 -> If multiplier is 1, then MPS = 1 and MPC = 0, meaning consumption and saving curves cannot be parallel.
Option 2 -> When consumption and saving curves are parallel, their slopes are equal, meaning MPC = MPS. Since MPC + MPS = 1, we get MPC = MPS = 0.5. Therefore, multiplier = 1/MPS = 1/0.5 = 2.
Option 3 -> If multiplier is 5, then MPS = 0.2 and MPC = 0.8, making the slopes unequal, so curves cannot be parallel.
Option 4 -> If multiplier is infinity, then MPS = 0 and MPC = 1, meaning consumption and saving curves cannot be parallel.
Hence, Option 2: 2 -> When consumption curve and saving curve are parallel, they have equal slopes. Slope of consumption curve = MPC and slope of saving curve = MPS. Therefore, MPC = MPS. Since MPC + MPS = 1, we get 2(MPC) = 1, so MPC = 0.5 and MPS = 0.5. The investment multiplier (k) = 1/MPS = 1/0.5 = 2. -> correct