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

Economics
JAMB 2010

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
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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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