Macroeconomics: Determination of Income and Employment · Class 12 · CBSE · Commerce Economics
The marginal propensity to consume in an economy is 0.75. If autonomous investment increases by ₹200 crore, the equilibrium income will increase by:
Practice question from Macroeconomics: Determination of Income and Employment (Class 12 · CBSE · Commerce Economics), with the correct answer and a step-by-step solution.
medium · MCQ · Q-EF94AA
The marginal propensity to consume in an economy is 0.75. If autonomous investment increases by ₹200 crore, the equilibrium income will increase by:
- A.₹150 crore
- B.₹200 crore
- C.₹600 crore
- D.₹800 croreCorrect answer
Solution
The investment multiplier is . Therefore, the increase in income is crore = ₹800 crore.
More from Macroeconomics: Determination of Income and Employment
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