The graph shows AD rising from AD₁ to AD₂ after investment rises by ₹20 crore. By how much does equilibrium income rise? Two parallel aggregate demand lines and a dashed 45° line. AD₁ starts at ₹100 crore and meets the 45° line at E₁ (income ₹400 crore). After investment rises by ₹20 crore, AD₂ starts at ₹120 crore and meets the 45° line at E₂ (income ₹480 crore).

Income Determination & the Multiplier · Question 35 of 58

The graph shows AD rising from AD₁ to AD₂ after investment rises by ₹20 crore.

MediumOriginal question

The graph shows AD rising from AD₁ to AD₂ after investment rises by ₹20 crore. By how much does equilibrium income rise?

₹20 croreCorrect answerYour answer₹60 croreCorrect answerYour answer₹80 croreCorrect answerYour answer₹480 croreCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer C

Correct answer: C

Worth noting

₹480 crore is the new level of income, not the rise.

Ten questions from Income Determination & the Multiplier, at your own pace.

Ten questions from Income Determination & the Multiplier, at your own pace.