Question

In an economy an increase in investment by 100 crore led to an increase in national income by 1000 crore. Find MPC.

Answer 1

`K=(DeltaY)/(DeltaI)=(1000)/(100)=10`
`"Also", K=(1)/(-MPC) or 10=(1)/(1-MPC) or 10(1-MPC)=1`
`or10-10MPC=1 or 10MPC=9`
`Rightarrow MPC=(9)/(10) Rightarrow MPC=0.9`