Question

f) In an
encreased
Coorony
by 7400
to
economy investment
dinvestment expenditure
and margnal propensity
Calculate increase
4
crore
chcome
consume is 0.8
in
and
increase in saving​

Answer 1

Answer:

Increase in Investment is Rs. 400 crores and increase in income is Rs. 1,600 crores,

Multiplier(k) => Change in income / change in investment = 1/ MPS

=> 1,600/400 = 1/MPS

=>4 = 1/ MPS

=> MPS = 1/ 4 = 0. 25