Estimate the value of incremental investment if, equilibrium level of income increases by ₹ 50,000 crore and half of additional income is always…

Given, Increase in Income (ΔY) = ₹ $\displaystyle 50,000$ croreMarginal Propensity to Save (MPS) = $\displaystyle 0.5$As we know,Investment Multiplier (K) = $\displaystyle \dfrac{1}{\text{MPS}}$$\displaystyle = \dfrac{1}{0.5} = 2$Investment Multiplier (K) = $\displaystyle \dfrac{\text{Change in Income }(\Delta Y)}{\text{Change in Investment }(\Delta I)}$$\displaystyle 2 = \dfrac{50,000}{\text{Change in Investment }(\Delta I)}$Change in Investment (ΔI) = ₹ $\displaystyle 25,000$ crore