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.
(a) Increase in income = 4000 crores. (b) Increase in consumption expenditure, i.e., ΔC ΔC = ΔY – ΔI = 4000 – 1000 = 3000 crores.
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