When economy decides to save the whole of its additional income, then value of investment multiplier will be:
Find incremental investment when equilibrium GDP increases by Rs 50,000 and half of additional income is always saved in the economy.
If the value of the multiplier is 4, what will be the effect on the income of an economy if investment increases by Rs 100 crore?
In an economy, the government makes some additional investment. Find its value when MPC = 0.5 and increase in income = Rs. 1,000.
Justify the statement:
(a) MPC and MPS are related to multiplier.
(b) Economy cannot be at equilibrium, when ex-ante savings greater than ex-ante investments.
(c) Investment increases with the increase in income.