Question

In the numerical example, investment rises by ₹5 crores and income finally rises by ₹20 crores. What is the value of the multiplier?

Options

• 2

• 3

• 4

• 5

Answer 1

4

Explanation: 

The multiplier is calculated as change in income divided by change in investment, so 20 ÷ 5 = 4.