The total increase in income due to a change in investment is an infinite amount as per the process of investment multiplier.

True

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False

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Solution

The correct option is B False
False.
Investment multiplier refers to the number of time by which the increase in output or income exceeds the increase in investment. It is measured as the ratio between change in income and change in investment.

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Similar questions

In an economy, 75 per cent of the increase in income is spent on consumption, Investment is increased by Rs 1,00 crore. Calculate :

(i) Total increase in income.

(ii) Total increase in consumption expenditure.

In an economy income increases by 10,000 as a result of a rise in investment expenditure by 1,000. Calculate

(i) Investment multiplier.

(ii) Marginal propensity to consume.

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