“In an economy, an increase in investment leads to doubling of the national income.” Calculate the Marginal Propensity to Consume (MPC) for the given economy.

We know that, Investment Multiplier (K) is;$\displaystyle K = \dfrac{\Delta Y}{\Delta I}$Also, $\displaystyle K = \dfrac{1}{1 - MPC}$Given; $\displaystyle K = \dfrac{\Delta Y}{\Delta I} = 2$$\displaystyle 2 = \dfrac{1}{1 - MPC}$$\displaystyle 2$ MPC = $\displaystyle 1$$\displaystyle MPC = \dfrac{1}{2} = 0.5$