JNU SSS 2013 Question 56: Keynesian cross and the multiplier

Answer Question Nos. 54–57 on the basis of the following information :

Suppose, in equilibrium, aggregate income (in units of money per year) in an economy $Y = C + I$, where investment expenditure (in units of money per year) $I = 1000$ and aggregate consumption expenditure (in units of money per year) $C$ satisfies the following conditions :

(i) $C$ is a function of current disposable income in the economy ($Y_d$).

(ii) If $Y_d = 0$, then $C = 500$.

(iii) Marginal propensity to save out of $Y_d$ is constant in the economy and equal to 30%.

Suppose the government collects direct tax revenues equal to 15% of $Y$ and makes direct transfer payments equal to 750 units of money per year.

If instead of 750 units of money the government makes annual transfer payments equal to 10% of $Y$, then the value of the investment multiplier will