Question 46
HardOriginal questionC = 40 + 0.75Y and investment rises from ₹60 crore to ₹80 crore. The new equilibrium income is
Show the answer and explanation
CorrectNot quiteAnswer C
Correct answer: C
Explanation
Old Y = (40 + 60) ÷ 0.25 = 400. ΔY = 4 × 20 = 80.
New Y = 400 + 80 = ₹480 crore (or (40 + 80) ÷ 0.25).
Worth noting
₹420 crore adds only the ₹20 crore of new investment and leaves out the multiplier.
- Concept
- New equilibrium
- Typical timeTypical
- 100 s
- Your timeYours
- —
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