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प्रश्न
Define investment multiplier.
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उत्तर
Investment multiplier or simply ‘multiplier’ implies that any change in the investment leads to a corresponding change in the income and output by multiple times. That is, in other words, the change in the income and output is more than (or multiple times) the change in investment. For example, if investment increases by 10%, then the corresponding increase in the income and output will be more than (let's say 30% or 40%) the increase in the investment. Algebraically, the investment multiplier is expressed as a ratio of the change in output to the change in investment.
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संबंधित प्रश्न
Define multiplier
What is the relation between marginal propensity to consume and multiplier?
Calculate the marginal propensity to consume if the value of 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)`
If MPC = 1, the value of the multiplier is ______
If MPC = 0, the value of the multiplier is: (Choose the correct alternative)
a. 0
b. 1
c. Between 0 and 1
d. Infinity
Find the value of additional investment made by the government when MPC = 0.5 and the increase in income (ΔY) = ₹ 1000.
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.
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.
Illustrate that the investment multiplier is inversely proportional to MPS.
