Question
If autonomous expenditure by the government increases by Rs 5,000, find increase in equilibrium GDP when half of income is always spent on the purchase of goods for consumption.
Answer: Option B
:
B
ΔY=11−MPC.ΔA [Where A is autonomous expenditure by the government]
=11−0.5×5,000=5,0000.5=10,000.
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:
B
ΔY=11−MPC.ΔA [Where A is autonomous expenditure by the government]
=11−0.5×5,000=5,0000.5=10,000.
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