Macro

Income & Employment

Easy

For a hypothetical economy, C = 200+0.8Y (where c= consumption and Y= Income) and Autonomous Investment = 400 crore. Value of Investment multiplier (k) = _____.

✅ Correct Option: 3

From $C = 200 + 0.8Y$ , the marginal propensity to consume is $MPC = 0.8$ . Investment multiplier $k = \frac{1}{1-MPC} = \frac{1}{1-0.8} = \frac{1}{0.2} = 5$ . The level of autonomous investment does not affect the value of the multiplier.

2026: 11 May Shift 1

If the investment is increased by 2 lacs and the value of the investment multiplier is 3/2 then what will be the value of change in income?

2023: 11 June Shift 3

Ex ante consumption implies :

2025: 26 May Shift 2

Deficient demand is said to exist in the economy when-

2026: 11 May Shift 1

Which one of the following is correct formula for deriving the investment multiplier?

A. 1/(1 - MPC)

B. 1/MPS

C. 1/(1 - MPS)

D. (1 - MPC)/MPS

Choose the correct answer from the options given below:

2023: 30 May Shift 1

If MPS in the economy increases, what will be the effect on MPC of economy ?

2026: 21 May Shift 2

With the price level as fixed, the aggregate supply curve in macroeconomic equilibrium is:

For a hypothetical economy, C = 200+0.8Y (where c= consumption and Y= Income) and Autonomous Investment = 400 crore. Value of Investment multiplier (k) = _____.

Solution

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