17 Views

Question : The investment multiplier is 2. If there is an autonomous increase in investment spending of INR 600, what will be the change in equilibrium income?

Option 1: INR 600

Option 2: INR 1,200

Option 3: INR 1,800

Option 4: INR 2,400


Team Careers360 1st Jan, 2024
Answer (1)
Team Careers360 12th Jan, 2024

Correct Answer: INR 1,200


Solution : The correct answer is  B) INR 1,200

To calculate the change in equilibrium income resulting from an autonomous increase in investment spending, we can use the multiplier effect. The investment multiplier is given as 2.

Given: Investment multiplier (K) = 2

Autonomous increase in investment spending = INR 600

Change in equilibrium income = K * Autonomous increase in investment spending

Change in equilibrium income = 2 * 600

Change in equilibrium income = 1200

Therefore, the change in equilibrium income is INR 1,200.

Related Questions

Amity University-Noida B.Tech...
Apply
Among top 100 Universities Globally in the Times Higher Education (THE) Interdisciplinary Science Rankings 2026
Amity University-Noida M.Tech...
Apply
Among top 100 Universities Globally in the Times Higher Education (THE) Interdisciplinary Science Rankings 2026
SCSVMV Deemed to be Universit...
Apply
MBA At at SCSVMV | NAAC 'A' Grade | AICTE & UGC Aproved | 100% Placement Support | Merit-based Scholarships
Amity University-Noida BBA Ad...
Apply
Among top 100 Universities Globally in the Times Higher Education (THE) Interdisciplinary Science Rankings 2026
RV University, Mysuru | B.Tec...
Apply
World-class and highly qualified engineering faculty. High-quality global education at an affordable cost
New Horizon College BBA Admis...
Apply
UG Admissions 2026 open| NAAC ‘A’ grade | Merit-based Scholarships available.
View All Application Forms

Download the Careers360 App on your Android phone

Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile

150M+ Students
30,000+ Colleges
500+ Exams
1500+ E-books