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Answer the Following Question. Find the Value of Additional Investment Made by the Government, When Mpc 05 and the Increase in Income (δY) = ₹ 1000. - Economics

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प्रश्न

Answer the following question.
Find the value of additional investment made by the government, when MPC 05 and the increase in income (ΔY) = ₹ 1000.

बेरीज

उत्तर

MPC = 0.5
Δ Y = ₹ 1,000
I = ?

MPC = `(Δ"C")/(Δ"Y")`

`(1)/(2) =(Δ"C")/(1,000)`

500 = ΔC

K = `(1)/(1 - "MPC")`

K= `(1)/(1 - 0.5)` = 2

But  K =`(Δ"Y")/(Δ"I")`

2 = `(1000)/(Δ"I")`

DI = 500

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Investment Multiplier and Its Mechanism
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2014-2015 (March) Set 1
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