If MPC is 0.7 while government expenditure increased by N 150m, the equilibrium national income…

If MPC is 0.7 while government expenditure increased by N 150m, the equilibrium national income is

  • A.
    N 214 million
  • B.
    N 45 million
  • C.
    N 105 million
  • D.
    N 500 million
Correct Answer: Option B
Explanation

1/(1-MPC) x150

1/(1-0.7) x 150= 45m
 

You May Also Like