The GDP of an economy is Rs.100 crores. The aggregate saving is Rs.30 crores. If the autonomous aggregate investment rises from Rs.30 crores to Rs.45 crores, ceteris paribus, what would be the GDP in that economy in the new equilibrium?
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Keynesian cross and the multiplier has come up 167 times in 7 exams since 2006.
This question is on The investment and expenditure multiplier, part of Keynesian cross and the multiplier in Macroeconomics.
Why a change in autonomous spending changes income by a larger amount, and what sets its size.
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Question from the CUET-PG 2024 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.