### Calculate Change in Income (ΔY) for a hypothetical economy. Given that:

### a) Marginal Propensity to Consume (MPC) = 0.8, and

### b) Change in Investment (ΔI) = ₹1,000 crores

(2 Marks)

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Answer
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Given Δ I = ₹1,000 crores

MPC = 0.8

As we know,

Multiplier (K) = (1/1-MPC)

K= (1/1-0.8)

K= (1/ 0.2)

K= 5 times

We know K = ΔF/ Δ I

5 = 𝛥 F/1000

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ΔY = ₹ 5,000 crores
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