Multiplier Mechanism

In an economy, investment expenditure is increased by Rs $2000$ crores. Calculate the total increase in income and consumption expenditure if ratio of MPC and MPS is $4:1$.

Calculate the value of multiplier if the entire increase in income is saved.

Calculate the value of multiplier, if the marginal propensity to save is $0.25$.

In the given figure, what does the gap 'KT' represent? State any two fiscal measures to correct the situation.

If in an economy:

Change in initial Investments ($∆I$) = Rs. $700$ crores

Marginal Propensity to Save (MPS) = $0.2$

Find the values of the following:

(b) Change in final income ($∆Y$)

If in an economy:

Change in initial Investments ($∆I$) = Rs. $1,200$ crores

Marginal Propensity to Save (MPS) = $0.2$

Find the values of the following:

(b) Change in final income ($∆Y$)

If in an economy:

Change in initial Investments ($∆I$) = Rs. $1,200$ crores

Marginal Propensity to Save (MPS) = $0.2$

Find the values of the following:

(a) Investment Multiplier (k)

If in an economy:

Change in initial Investments ($∆I$) = Rs. $700$ crores

Marginal Propensity to Save (MPS) = $0.2$

Find the values of the following:

(a) Investment Multiplier (k)

If in an economy:

Change in initial Investments ($∆I$) = Rs. $500$ crores

Marginal Propensity to Save (MPS) = $0.2$

Find the values of the following:

(b) Change in final income ($∆Y$).

If in an economy:

Change in initial Investments ($∆I$) = Rs. $500$ crores

Marginal Propensity to Save (MPS) = $0.2$

Find the values of the following:

(a) Investment multiplier (k)

Define full employment in an economy. Discuss the situation when aggregate demand is more than aggregate supply at full employment income level. 

Assuming that increase in investment is Rs. $900$ crore and marginal propensity to consume is $0.6$, explain the working of multiplier.

Assuming that increase in investment is Rs. $800$ crore and marginal propensity to consume is $0.8$, explain the working of multiplier.

In an economy, investment is increased by Rs$300$ crore. If the marginal propensity to consume is $\frac{2}{3}$, calculate increase in national income.

In an economy, an increase in investment by Rs$100$ crore led to increase in national income by Rs$1,000$ crore. Find marginal propensity to consume.

Explain the concept of Deflationary Gap and the role of 'Open Market Operations' in reducing this gap. 

The value of multiplier is: 

Discuss the working of investment multiplier with the help of a numerical example.

The saving function of an economy is given as: S = (-) $50 + 0.10Y$. If the ex-ante Investments are Rs. $450$ crores, calculate the additional investments which will be needed to gain an additional income level of Rs. $3,000$ crores.

If in an economy:

Change in initial Investments ($∆I$) = Rs. $1,000$ crores

Marginal Propensity to Save (MPS) = $0.2$

Find the Change in Final Income ($∆Y$)