मराठी

How is Investment Multiplier Related to Marginal Propensity to Consume? - Economics

Advertisements
Advertisements

प्रश्न

How is investment multiplier related to marginal propensity to consume?

उत्तर

There exists a direct and positive relationship between Investment Multiplier and MPC. Algebraically, the relationship is expressed as:

\[k = \frac{1}{1 - MPC} = \frac{1}{1 - c}\]
shaalaa.com
Investment Multiplier and Its Mechanism
  या प्रश्नात किंवा उत्तरात काही त्रुटी आहे का?
2017-2018 (March) Delhi Set 2

संबंधित प्रश्‍न

Define multiplier


What is the relation between marginal propensity to consume and multiplier?


If MPC = 1, the value of the multiplier is ______


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

Find the values of the following:
(a) Investment multiplier (k),
(b) Change in final income (∆Y)

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)


Which of the following statements is true?


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).


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.


Share
Notifications

Englishहिंदीमराठी


      Forgot password?
Use app×