Given that a country’s national income is Ushs. 100millions, the marginal propensity to consume is 0.6. Calculate the country’s final level of income (2marks)
Multiplier = 1/(1-MPC) = 1/(1-0.6) = 1/0.4= 2.5
Final level of national income = initial income x multiplier = 2.5 x 100m = 250m
CATEGORIES Economics
TAGS Dr. Bbosa Science
