In an economy, national income
increases by 500 crore as a result of increase in
investment by 125. Calculate MPC.
Answers
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2
Answer:
0.25
Explanation:
Increase in Investment is Rs. 125 crores and increase in income is Rs. 500 crores,
Multiplier(k) => Change in income / change in investment = 1/ MPS
=> 500/125 = 1/MPS
=>4 = 1/ MPS
=> MPS = 1/ 4 = 0. 25.
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