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Investment multiplier shows the effect of investment on-
- a)Employment
- b)Savings
- c)Income
- d)Consumption
Correct answer is option 'C'. Can you explain this answer?
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Investment multiplier shows the effect of investment on-a)Employmentb...
An investment multiplier is simply the multiplier effect of an injection of investment into an economy. The multiplier effect refers to the idea that an initial spending rise can lead to an even greater increase in national income.
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Investment multiplier shows the effect of investment on-a)Employmentb...
Understanding the Investment Multiplier
The investment multiplier is a crucial concept in economics that illustrates how an initial increase in investment can lead to a more significant overall increase in income.
What is the Investment Multiplier?
- The investment multiplier measures the ratio of change in national income to the change in investment that caused it.
- It demonstrates how investment generates further economic activity through a chain of spending and income generation.
How Does It Work?
- When businesses invest in new projects, they create jobs and increase demand for goods and services.
- This initial investment leads to increased income for employees and suppliers, who then spend their income, further stimulating economic activity.
Key Effects of the Investment Multiplier:
- **Increased Income:** The primary effect of the investment multiplier is the enhancement of national income.
- **Cumulative Impact:** Each round of spending creates more income, leading to a cumulative effect that can significantly boost the economy.
Conclusion
The investment multiplier is essential for understanding how investments can amplify income levels in an economy. Therefore, the correct answer to the question is option 'C' - Income, as it directly reflects the multiplier's effect on overall economic performance.
The investment multiplier is a crucial concept in economics that illustrates how an initial increase in investment can lead to a more significant overall increase in income.
What is the Investment Multiplier?
- The investment multiplier measures the ratio of change in national income to the change in investment that caused it.
- It demonstrates how investment generates further economic activity through a chain of spending and income generation.
How Does It Work?
- When businesses invest in new projects, they create jobs and increase demand for goods and services.
- This initial investment leads to increased income for employees and suppliers, who then spend their income, further stimulating economic activity.
Key Effects of the Investment Multiplier:
- **Increased Income:** The primary effect of the investment multiplier is the enhancement of national income.
- **Cumulative Impact:** Each round of spending creates more income, leading to a cumulative effect that can significantly boost the economy.
Conclusion
The investment multiplier is essential for understanding how investments can amplify income levels in an economy. Therefore, the correct answer to the question is option 'C' - Income, as it directly reflects the multiplier's effect on overall economic performance.
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Investment multiplier shows the effect of investment on-a)Employmentb)Savingsc)Incomed)ConsumptionCorrect answer is option 'C'. Can you explain this answer?
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Investment multiplier shows the effect of investment on-a)Employmentb)Savingsc)Incomed)ConsumptionCorrect answer is option 'C'. Can you explain this answer? for SSC 2024 is part of SSC preparation. The Question and answers have been prepared according to the SSC exam syllabus. Information about Investment multiplier shows the effect of investment on-a)Employmentb)Savingsc)Incomed)ConsumptionCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for SSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Investment multiplier shows the effect of investment on-a)Employmentb)Savingsc)Incomed)ConsumptionCorrect answer is option 'C'. Can you explain this answer?.
Investment multiplier shows the effect of investment on-a)Employmentb)Savingsc)Incomed)ConsumptionCorrect answer is option 'C'. Can you explain this answer? for SSC 2024 is part of SSC preparation. The Question and answers have been prepared according to the SSC exam syllabus. Information about Investment multiplier shows the effect of investment on-a)Employmentb)Savingsc)Incomed)ConsumptionCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for SSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Investment multiplier shows the effect of investment on-a)Employmentb)Savingsc)Incomed)ConsumptionCorrect answer is option 'C'. Can you explain this answer?.
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