Suppose there is new investment of Rs. 10 crores and the MPS is 0.2 the aggregate income increases by -
Given \(\Delta I = \text{Rs. } 10\text{ crores}\) and \(MPS = 0.2\), the investment multiplier is \(k = \frac{1}{MPS} = \frac{1}{0.2} = 5\). Therefore, aggregate income…
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Suppose there is new investment of Rs. 10 crores and the MPS is 0.2 the aggregate income increases by -
Answer and explanation
Correct answer A
Given and , the investment multiplier is . Therefore, aggregate income increases by .
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RPSC School Lecturer (School Education)