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In a economy , the actual level of income is Rs. 500 crores, whereas, the full employment level of income is Rs. 8000 crores. If one - fourth of additional income is saved, calculate increase in investment required to achieve full employment level of income. |
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Answer» Multiplier (k) `=(1)/(MPS)=(1)/(0.25)=4` We also KNOW : k `=("Change in Income"(DeltaY))/("Change in INVESTMENT"(DELTAL))` Given : Change in Income `(DeltaY) = 800 -500 = Rs. 3000` crores i.e., 4`=(300)/("Change in Investment"(Deltal))` Hence ,Change in Investment required `= Rs. 75` crores |
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