New RBI Grade B 2025 Notification will come Soon! Enroll Here

    Question

    For which of the following consumption function the

    value of the income multiplier K = 4?
    A C= 100 + 0.5Y Correct Answer Incorrect Answer
    B C = 50 + 0.8Y Correct Answer Incorrect Answer
    C C= 200 + 0.75Y Correct Answer Incorrect Answer
    D C = 50 + 0.4Y Correct Answer Incorrect Answer
    E C = 120 + 1/4Y Correct Answer Incorrect Answer

    Solution

    C= 200 + 0.75Y MPC = 0.75, so multiplier = 1/(1-MPC) = 4

    Practice Next