In an economy the marginal propensity to save is 0.25 investment is increased by 200 crores calculate the total increase in income and consumption expenditure

Given MPs = 0.25
Therefore mpc = 0.75. ( mpc+ MPs )=1

K= 1/ MPs or ?y/?I

Therefore k= 1/0.25

K= 4

4 = ?y/?I

?y = 800 crores

We know mpc = ?c/?y

0.75 = ?c/800

?c = 600