Answer to Question #180360 in Economics for joel

Question

When the level of saving increases by Rs. 500, income increases by Rs. 2000, the value of Investment Multiplier will be

Answer 1

The investment multiplier is a coefficient that shows the relationship between the change in investment and the amount of income received. This indicator significantly increases the level of demand, as a result of the action of investments to increase income.

$$\frac{2000}{500}=4$$