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JAMB Economics 2014 Question 26

Question 26

National Income

If MPC = ⅔ and investment is ₦100 million, the level of national income is

  1. A.₦303 million.
  2. B.₦300 million.
  3. C.₦100 million.
  4. D.₦10 million.
Show the answer and explanation

Answer: B (₦300 million.)

Explanation

Multiplier = 1/(1 − ⅔) = 3. Income = 3 × ₦100m = ₦300m.