If MPC = 0.75, how much additional investment is required to increase income by Rs. 600? Find the multiplier.

prydlyfrl7w

prydlyfrl7w

Answered question

2023-01-15

If MPC = 0.75, how much additional investment is required to increase income by Rs. 600? Find the multiplier.

Answer & Explanation

Salys9g1

Salys9g1

Beginner2023-01-16Added 5 answers

K ( m u l t i p l i e r ) = 1 1 M P C = 1 1 0.75 = 4 K = Δ Y Δ I Δ I = Δ Y K = 600 4 = 150
Therefore, a further investment of Rs 150 is needed to grow income by Rs 600, and the multiplier's value is 4.

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