due to an increase investment the national income increased by 10,000 karod if 20% of additional income is saved calculate the increase in investment
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Answer: Change in Investment = 2000
Explanation:
GIVEN: MPS= 20% or 0.2
Change in income = 10000
So,
K= 1/MPS then K= 1/0.2
We know that K= change in income / change in Investment
1/0.2= 1000/change in Investment
Therefore, change in Investment = 2000
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