ANSWER THE FOLLOWING-
Dear Student
(A) Investment multiplier = k = 1/MPS = 1/0.2 = 5
(B) Change in final income = k= change in Y / change in I
5 = Change in Y / 1000
5000 = change in Y or change in final income
Regards
(A) Investment multiplier = k = 1/MPS = 1/0.2 = 5
(B) Change in final income = k= change in Y / change in I
5 = Change in Y / 1000
5000 = change in Y or change in final income
Regards