Economics
JAMB 2010
If MPC is 0.7 while government expenditure increased by N 150m, the equilibrium national income is
-
A.
N 214 million
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B.
N 45 million
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C.
N 105 million
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D.
N 500 million
Correct Answer: Option D
Explanation
1/(1-MPC) x150
\(\frac{1}{(1- 0.7)}\)
\(\frac{1}{0.3}\) x 150= 500m
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