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SECTION A: How can efficiency of labour be improved in an economy? SECTION B: When will an increase in national income indicate an improvement in the standard of living for a country?

Economics

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Question 30:

  1. Calculate the change in income (ΔY\Delta Y).

    Assuming the question was: "If the marginal propensity to consume (MPC) is 0.75 and autonomous investment increases by 6,750, what is the change in national income?"
    First, calculate the multiplier (kk).

    k=11−MPCk = \frac{1}{1 - \text{MPC}} k=11−0.75=10.25=4k = \frac{1}{1 - 0.75} = \frac{1}{0.25} = 4
  2. Calculate the change in national income.

    ΔY=k×ΔI\Delta Y = k \times \Delta I ΔY=4×6,750\Delta Y = 4 \times 6,750 ΔY=27,000\Delta Y = 27,000

    The change in national income is $\boxed{\text{27,00

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