If the investment increases by Rs. 5 million and the marginal propensity to consume is 0.75,by how much will real GDP change?

a)Rs. 5 million

b)Rs. 6.7 million

c)Rs. 10 million

d)Rs. 20 million

2.What happens if the real interest rate falls and business taxes rise? (All else equal)

1 point

a)not sure what will happen to investment

b)investment will rise

c)investment will rise until it is equal to saving

d)investment will fall