Advertisements
Advertisements
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
Define 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)`
Calculate the marginal propensity to consume if the value of multiplier is 4.
Define investment multiplier.
If in an economy :
Change in initial Investments (∆I) = ₹ 500 crores
Marginal Propensity to Save (MPS) = 0.2
Suppose in an economy, the initial deposits of ₹ 400 crores lead to the creation of total deposits worth ₹ 4000 crores.
Under the given situation the value of reserve requirements would be ____________.
Keynesian multiplier establishes a relationship between ______
Keynes derived Investment Multiplier from Kahn’s ______
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)
For a hypothetical economy, assuming there is an increase in the Marginal Propensity to Consume (MPC) from 80% to 90% and change in investment to be ₹ 1000 crore.
Using the concept of investment multiplier, calculate the increase in income due to change in Marginal Propensity to Consume.
For a hypothetical economy, assuming there is an increase in the Marginal Propensity to Consume from 80% to 90% and change in investment to be ₹ 2000 crore.
Using the concept of investment multiplier, calculate the increase in income due to change in Marginal Propensity to Consume.
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.
