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60. given c 60+ 0.8yd, yä = y, l= 7o, if investment ([) increases by 10 what would be new income and value of multiplier: (1) income= 700, multiplier = 5 (2 inc
60. Given C 60+ 0.8Yd, Yä = Y, l= 7O, if investment ([) increases by 10 what would be new income and value of multiplier: (1) Income= 700, multiplier = 5 (2 Income = 650, multiplier = 5 (3 Income 600 multiplier =6 (4) None of the Above TTC- 60 + 0.8Yd, Yd - Y, I - 70 z PraST () 10 1) 37T73 700, 5 = 5 (2) T4 650, T5 = 5 (3) HT = 600, T"T6- 6 (4} 62. The MEC and rate of interest determine investment in any economy Which of the following statement is true about them ? (1) As level of investment incTeases MEC increase and rate of interest falls (2) MEC is high during recession (3) MEC is positively related to expected income and negatively to supply price of capital assets 4) All of the Above
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Nidhi taparia
Option (4) is automatically incorrect.
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Nidhi taparia
Option (2) is incorrect because MEC isn't high during recession. In fact, Keynes maintains that recession kicks in because MEC falls.
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Nidhi taparia
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61. Option (3) is the correct answer. Let's look at each option to understand why it's right or wrong. Option (1) suggests investment decides MEC and Interest rate. While the relationship defined is right (i.e. MEC is directly proportional to investment and interest rate is inversely proportional to investment), but investment is a function of these two things and not the other way round.
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Nidhi taparia Best Answer
60. Option (1) is the correct answer. Please refer to the image.
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Nidhi taparia
Option (3) is correct because MEC does depend on prospective income positively and supply price negatively.