An economy saves 25% of its national income and invests a sum of Rs.1000 each year. The economy starts with Rs.10,000 as its initial national income. Assume that the consumption in any year depends on the income of the previous year. The national income of the economy after 10 years is Rs. ________ (rounded off to two decimal places).
IIT JAM 2025 Question 53: Keynesian cross and the multiplier
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Keynesian cross and the multiplier has come up 167 times in 7 exams since 2006.
What this question tests
This question is on Multiplier extensions: induced investment and class saving, part of Keynesian cross and the multiplier in Macroeconomics.
The multiplier when investment responds to income or when groups have different saving behaviour.
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