MPS = 0.40, increase in investment = ₹ 500 crores, increase in income?

₹ 1200 ₹ 1210 ₹ 1250 ₹ 1300

₹ 1250

Multiplier = \(\frac{1 }{\text 1- MPC }\) = \(\frac{ 1}{MPS }\) = \(\frac{1 }{0.4 }\) = 2.5 Multiplier = \(\frac{ΔY }{ΔI }\) 2.5 = \(\frac{ΔY }{ 500}\) ∆Y = 2.5 * 500 ∆Y = 1250