Jnu 2017 ecom q no 32

[Jinx]

In an open economy with unutilised capacity, if the investment rate remains unchanged, saving amount to 20 percent of GDP and import account for 30 percent of GDP, an increase in fiscal deficit by 100 units will cause economic activity to increase by?

[soimmoi]

multiplier= 1/1-c+ct+m
here it's just 1/ 1-c+m , c= 0.8Y   M= 0.3y    multiplier =2  G increase by 100 units so ans 200 units

[Jinx]

Hey thanks .

On Nov 16, 2017 12:50 PM, "soimmoi [via Discussion forum]" <[hidden email]> wrote:

multiplier= 1/1-c+ct+m
here it's just 1/ 1-c+m , c= 0.8Y   M= 0.3y    multiplier =2  G increase by 100 units so ans 200 units

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