Question

in an economy the marginal propensity consumption is 0.75.Investment expenditure in the economy increases by 75 . calculate the total increase in national income.​

Answer 1

Answer:

ok

Explanation:

investment increases by Rs. 75 crores and MPC= 0.75, then

Multiplier(k) => Change in income / 75 = 1/ (1-MPC)

=> Change in income / 75 = 1/0.25

=> Change in income / 75 = 4

=> change in income = 4(75) = 300 crores

Hence, National income increases by 300 crores.

Answer 2

Answer:

tgxgxxgyxgxyxgxgxgxhxhdgdgdgdhdydd