Question

In an economy, if initial investments are increased by 100 crores, discuss the working of investment multiplier presuming marginal propensity to consume is 0.8.​

Answer 1

Answer:

Saying that the value of 0.8 and the initial investment is Rs 800 core. For every increase r .1 income ppl consume 0.8 of the income so ppl consume Rs .80 and save Rs .20

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