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प्रश्न
For a hypothetical economy, assuming there is an increase in the marginal Propensity to Consume (MPC) from 75% to 90% and change in investment to be ₹ 1,000 crore.
Using the concept of investment multiplier, calculate the increase in income due to change in Marginal Propensity to Consume (MPC).
उत्तर
`"Multiplier" (k) = (1/(1-MPC))=1/(1-0.80) = 1/0.20 = 5`
`"We also know K" = "Changes in Income (ΔY)"/"Change in Investment (Δl)"`
Given:
Change in Investment (Δl) + Rs. 1000 cr or es
`5 = ("Change in Income" (ΔY))/1000`
Change in Income (ΔY) = Rs. 5,000 crore
संबंधित प्रश्न
Calculate the marginal propensity to consume if the value of multiplier.
The value of the multiplier is: (choose the correct alternative)
a. `1/"MPC"`
b. `1/"MPS"`
c. `1/(1-"MPS")`
d. `1/(MPC- 1)`
If MPC = 1, the value of the multiplier is ______
If MPC = 0, the value of the multiplier is: (Choose the correct alternative)
a. 0
b. 1
c. Between 0 and 1
d. Infinity
Calculate the marginal propensity to consume if the value of multiplier is 4.
How is investment multiplier related to marginal propensity to consume?
Explain the relationship between investment multiplier and marginal propensity to consume.
Answer the following question.
Find the value of additional investment made by the government, when MPC 05 and the increase in income (ΔY) = ₹ 1000.
Keynesian multiplier establishes a relationship between ______
The value of Keynesian Investment Multiplier depends on ______
Discuss the mechanism of investment multiplier with the help of a numerical.
The formula of investment multiplier in terms of MPS is (1)
If a linear consumption curve takes a parallel shift downwards, the value of investment multiplier will ______.
Explain the concept of Investment Multiplier using a diagram.
Mention any one difference between Induced investment and Autonomous investment.
Illustrate that the investment multiplier is inversely proportional to MPS.
