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Income Determination & the Multiplier · Question 41 of 58

Question 41

MediumOriginal question

If the MPS is 0.25 and investment falls by ₹40 crore, income

Options for question 41

Show the answer and explanation
CorrectNot quiteAnswer C

Correct answer: C

Explanation

  1. k = 1 ÷ 0.25 = 4.

  2. ΔY = 4 × (−40) = −₹160 crore.

Concept
Multiplier in reverse
Typical time
70 s
Your time
—
The rule this testsThe investment multiplier
Practise this chapter →

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

Practise this chapter →

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