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
Correct Answer: B. N 45 million
Explanation
1/(1-MPC) x150 1/(1-0.7) x 150= 45m
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