Question

if in an economy the consumption and saving curves are parallel to each other what will be the value of investment multipliers? explain​

Answer 1

Explanation:

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The gap between the consumption curve and AD curve is constant, that is, the two curves are parallel because Investment is constant (Fig. 6.1). 4. Saving curve is positively sloped because saving is directly related to the income level.

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Answer 2

Answer:

as a result of the investment of Rs. 100 crores, the national income increases by Rs. 300 crores, multiplier is equal to 3. If as a result of investment of Rs. 100 crores, total national income increases by Rs. 400 crores, multiplier is 4. The multiplier is, therefore, the ratio of increment in income to the increment in investment. If ∆I stands for increment in investment and ∆Y stands for the resultant increase in income, then multiplier is equal to the ratio of increment in income (∆K) to the increment in investment (∆