Q. 124.1( 8 Votes )

Calculate the val

Answer :

At equilibrium level of an economy Y=C+I


Given, autonomous consumption =500 crores and


Ex-ante investment = 4000 crores


18000=500-MPC(18000)+4000


MPC(18000)-18000=4500


MPC=13500/18000


Or


MPC=0.75


MPS=change in savings /change in income=20/100=0.2


Investment multiplier (K)=change in income/change in investment


5=6000/change in investment


Increase in investment by INR 1200 crores is required to attain additional income of 6000 INR


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