Saved Bookmarks
| 1. |
In an economy an increase in investment leads to an increase in national income three times more than increase in investment. Calculate MPC. |
|
Answer» Solution :SINCE increase in NATIONAL income (Y) is three times more than increase in investment, it means total increase in (Y) is four times, i.e. MULTIPLIER (K) is 4. `K=(1)/(1-MPC)` `4=(1)/(1-MPC)` `4-4MPC=1 or 4MPC=3` `HENCE, MPC=(3)/(4)=0.75` |
|