how much additional income will be generated in an economy with an additional investment of Rs 100 crores and when - Economics - Determination of Income and Employment

Question

how much additional income will be generated in an economy with an
additional investment of Rs 100 crores and when half of increase in
income is spent on consumption?

Amit Chatterjee · Accepted Answer

Dear Student, your peer Gagan has given the correct answer Anyway,
I am hereby providing both of you with the detailed calculation of
this question

Given∆I = Rs 100 crore andMPC = 12We know that:∆Y =
k∆Ior, ∆Y = 11-MPC×∆Ior, ∆Y =
11-12× 100or, ∆Y = 112× 100 =Rs 200 crore

how much additional income will be generated in an economy with an additional investment of Rs 100 crores and when half of increase in income is spent on consumption?