When MPS is 0.25 and the initial increase in autonomous spending is Rs. 100, then the expenditure multiplier and the resultant increase in GDP respectively are:
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UGC-NET 2023 Question 25: 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 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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