1.

in an economy , investment expenditure is increaed by Rs. 700 croce and MPC is 0.9 calculate total increase in income and consumption expenditure .

Answer» `K=(1)/(1-MPC)=(1)/(1-0.95)=(1)/(0.1)=(1)/(1//10)=10`
total increase in income
= increase in investment `xx` K
`=700xx10`
= 7,000 crore
total increase in consumptation expenditure
`=0.9 " of " 700 `
`=(9) /(10) " of " 7,000 = 6,300 ` crore


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