CUET CUET Economics 2024 - If the value of Investment Multiplier is 5 and the increased income is ₹ 800 crore in an economy, then find the value of change in the investment in the economy. | PYQs + Solutions

CUET Economics 2024

Economics

Income & Employment

Easy

If the value of Investment Multiplier is 5 and the increased income is ₹ 800 crore in an economy, then find the value of change in the investment in the economy.

₹ 4000 crore

₹ 20 crore

₹ 400 crore

₹ 160 crore

Correct Option: 4

To find the change in investment, we use the formula:

Change in Income = Investment Multiplier × Change in Investment

Here, we know:

\newline

- Investment Multiplier = 5

\newline

- Increased Income = ₹ 800 crore

We can rearrange the formula to find the change in investment:

Change in Investment = Increased Income / Investment Multiplier

Now, substituting the values:

Change in Investment = ₹ 800 crore / 5

\newline

Change in Investment = ₹ 160 crore