Answer:
Given: MPC = 0.75 \[\Delta I\]=75 To calculate: \[\Delta Y\] We know, Multiplier, k = \[\frac{1}{1-MPC}=\frac{1}{1-0.75}=\frac{1}{0.25}=4\] Now, \[k=\frac{\Delta Y}{\Delta I}\] Substituting the value, \[4=\frac{\Delta Y}{75}\] or, \[\Delta Y\]= Rs. 300 crore Thus with an increase in the investment expenditure by Rs 75 crores, National Income increased by Rs 300 crore.
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