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प्रश्न
If the initial increase in autonomous investment ₹ 100 Cr and MPC = 0.8, calculate the increase in income.
संख्यात्मक
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उत्तर
Change in Autonomous Investment (ΔI) = ₹ 100 Cr.
Marginal Propensity to Consume (MPC) = 0.80
Hence, The Multiplier (K) = `1/1 - "MPC"`
= `1/1 - 0.80`
= 5
So, the increase in income (ΔY) = ΔI × K
= 100 × 5
= 500
Hence, the increase in income is ₹ 500 Cr.
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