In an economy , investment expenditure is increased by Rs 700 crore. T – InterviewSolution

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1.	In an economy , investment expenditure is increased by Rs 700 crore. The marginal propensity to consume is 0.8. Calculate the total increase in income and consumption expenditure.
Answer» 3500,2800Explanation:K = 1 /1- MPCk = 5k = change in income/change in investment5=change in income/700change in income = 3500mpc = change in cosumption/change in income0.8 = change in C/3500change in CONSUMPTION = 2800

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