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Income Determination & the Multiplier · Question 52 of 58

Question 52

HardOriginal question

Investment rises by ₹100 crore and the MPC is 0.8. After the first three rounds, the total rise in income is

Options for question 52

Show the answer and explanation
CorrectNot quiteAnswer B

Correct answer: B

Explanation

  1. Rounds: 100, then 0.8 × 100 = 80, then 0.8 × 80 = 64.

  2. Total so far = 100 + 80 + 64 = ₹244 crore; it keeps growing towards ₹500 crore.

Worth noting

₹500 crore is the final total after all rounds, not after three.

Concept
Rounds of the multiplier
Typical time
100 s
Your time
—
The rule this testsThe multiplier round by round
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Ten questions from Income Determination & the Multiplier, at your own pace.

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