The ratio of increase in income to increase in investment is termed as Option 1: Marginal propensity to save. Option 2: Marginal propensity to consume. Option 3: Marginal propensity to invest. Option 4: Investment Multiplier.

The answer is 'Investment Multiplier.'. View full solution:

CUET Economics - The ratio of increase in income to increase in investment is termed as | PYQs + Solutions

CUET Economics 2025 26 May Shift 2

Macro

Medium

Marginal propensity to save.

Marginal propensity to consume.

Marginal propensity to invest.

Investment Multiplier.

✅ Correct Option: 4

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A hypothetical economy tends to save only 25% of its additional income. How much additional income would be generated by it if the investment is increased by 50 crores?

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Match List-I with List-II

List-I	List-II
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(B) Decline in exports	(II) A monetary measure to correct disequilibrium between AD and AS
(C) Cash reserve ratio	(III) Pursued by the government of the country
(D) Fiscal policy	(IV) There is no unemployment or underemployment in the country

Choose the correct answer from the options given below:

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CUET Economics 2025 26 May Shift 2 PYQs

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