Question

If investment is 1000 crore and MPS=4. Find out income generated and explain multiplier​

Answer 1

Answer:

If investment increases by Rs. 1,000 crores and MPS= 0.4, then

Multiplier(k) => Change in income / 1,00 = 1/ MPS

=> Change in income / 1,000 = 1/0.4

=> Change in income / 1,000 = 2.5

=> change in income = 2.5 (1,000) = 2500 crores.

Hence, National income increases by 2500 crores.

Answer 2

Answer:

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