Question

An increase of Rs. 250 crore in investment in an economy results in income increasing by
three times more than the increase in investment Calculate the following.
a. Marginal propensity to save
b. Value of multiplier



Irrelevant answers will be reported.
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Answer 1

Answer:

Multiplier (k) =Change in Income(ΔY)/Charge in Investmemt(Δl)=1,000/250=4=

We know, Multiplier (k) =1/1−MPC

4=1/1−MPC

1−MPC=1/4

Hence , MPC =1−0.25=0.75

Explanation:

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Answer 2

Explanation:

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