Question 42
MediumOriginal questionThe MPC is 0.9 and investment rises by ₹30 crore. Income rises by
Show the answer and explanation
CorrectNot quiteAnswer D
Correct answer: D
Explanation
k = 1 ÷ (1 − 0.9) = 10.
ΔY = 10 × 30 = ₹300 crore.
Worth noting
₹270 crore is the rise in consumption, not in income.
- Concept
- Large multiplier
- Typical timeTypical
- 70 s
- Your timeYours
- —
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