Question

If MPC is 0.75 and investment increase by ₹ 250 crore, then the income would increase by ______.

विकल्प

• ₹ 800

• ₹ 1000

• ₹ 1200

• ₹ 1500

Answer 1

If MPC is 0.75 and investment increase by ₹ 250 crore, then the income would increase by ₹ 1000.

Explanation:

Here

K = `1/(1 - MPC)`

= `1/(1 - 0.75)`

= `1/0.25`

= 4

ΔY = k × ΔI

Given that the investment increase (ΔI) is ₹ 250 crore

ΔY = 4 × ₹ 250 crore

= ₹ 1000 crore