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Explain working of investment multiplier with …

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Explain working of investment multiplier with the help of numerical example

Posted by Suraj Jha 3 years, 11 months ago

CBSE > Class 12 > Economics

1 answers

Nagendran Krishna 3 years, 11 months ago

Investment multiplier is the the ratio between change in y and change in i Numerical eg: Suppose change in i = 100 and MPC = 0.5 no/change in y/C/Change S 1 100 50 50 2 50 25 25 3 25 12.5 12.5 - -. - total 200 100 100 above table shows that as result of increase in investment leds to an increase in the consumption and total income by 200 the investment has a multiplier effect on the income

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