Question

The government increases its expenditure by ₹200 million, and the marginal propensity to consume (MP

  • C is 0.75. Assuming no change in taxes or prices, what is the resulting equilibrium level of national income?
A ₹200 million
B ₹800 million
C ₹400 million
D ₹600 million
E ₹500 million
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