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What is meant by investment multiplier? |
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Answer» An investment multiplier refers to the fact that an increase in private or public investment expenditure leads to a more than proportionate increase in the level of national output. The investment multiplier is calculated as the ratio of change in income to the change in investment. Investment multiplier = ∆Y/∆I where ∆Y = change in income ∆I = change in investment. |
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