From the following data calculate Investment Multiplier and Equilibrium level Income in the economy. (i) Change in initial investment (Al) = rs. 1,000 crore (ii) Marginal Propensity to Save (MPS) = 0.5 (iii) Autonomous consumption (*) = rs. 50 crore (iv) Planned investment = rs. 100 crore Ans. the equilibrium level of income in the economy is Rs. 2,000 crore.
