JAMB - Economics (2010 - No. 26)
If MPC is 0.7 while government expenditure increased by N 150m, the equilibrium national income is
N 214 million
N 45 million
N 105 million
N 500 million
Explanation
1/(1-MPC) x150
\(\frac{1}{(1- 0.7)}\)
\(\frac{1}{0.3}\) x 150= 500m
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