If in an economy, out of every additional Rs.100 of national income, Rs.20 is taxed, Rs.20 is saved, and Rs.10 is spent on imports, then the value of multiplier is:

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Question:

If in an economy, out of every additional Rs.100 of national income, Rs.20 is taxed, Rs.20 is saved, and Rs.10 is spent on imports, then the value of multiplier is:

A.

2

B.

2.5

C.

3.3

D.

5

Answer» a. 2

Note: The above multiple-choice question is for all general and Competitive Exams in India.