Question
In an economy 75% of increase in income is spent on consumption. Investment is increased by र 1000 crores. Calculate:
(a) Total increase in income, and
(b) Total increase in consumption expenditure.
Solution
(a) 
Increase in income = 4000 crores.
(b) Increase in consumption expenditure, i.e., ΔC
ΔC = ΔY – ΔI
= 4000 – 1000 = 3000 crores.
Increase in income = 4000 crores.
(b) Increase in consumption expenditure, i.e., ΔC
ΔC = ΔY – ΔI
= 4000 – 1000 = 3000 crores.
