An increase in Rs 250 in investment in an economy results in income increasing by three times more than the - Economics - Determination of Income and Employment

Question

An increase in Rs 250 in investment in an economy results in income
increasing by three times more than the increase in investment Find
MPC , delta Savings , delta Consuption Expenditure and multiplier
Please tell me four of them

Vaishali Nebhwani · Accepted Answer

Dear student,

Multiplier k = Change in income (∆Y)Change in investment (∆I)k = 750250k = 3
Also k = 11-MPC3 =11-MPC3 -3MPC = 1MPC = 0
67MPC =∆C∆Y0
67 = ∆C750∆C = 502
5Change in saving = change in income -change in cosumption∆S =750 -502
5 = 247 5

Regards

An increase in Rs.250 in investment in an economy results in income increasing by three times more than the increase in investment . Find MPC , delta Savings , delta Consuption Expenditure and multiplier. Please tell me four of them