autonomous consumption c1=R2000 autonomous investment =R6000 marginal propensity to consume c=3/4 the value of the multiplier is (1) 3/4 (2) 1/4 (3) 5 (4) 4

Multiplier effect is an effect in economics, in which an increase in spending produces an increase in national income and consumption greater than the initial amount spent. If MPS =...

induced consumption expenditure = 0.9*Income

If C=100+0.2yThen y = 2000C=100+0.2*2000=500consumption will be R500

MPC or Marginal propensity to consume is also given as, (1-MPS).  Where, MPS is marginal propensity to save.So, if MPS =3/4Then MPC = (1-3/4)                 = 1/4 or 0.25

Y=C+IC=a+cYY=200+0.75Y+6000.25Y=800Y=3200Since this answer doesn't exist, I've decided that it is 8000

Solution:Autonomous spending is that part of spending which is independent of the income level.Therefore; Autonomous Spending = $( 115 + 550) = $665The multiplier m = 1/(1-MPC) = 1/0.4...

At Equillibrium, AD=ASY=C+IC=a+bYC=R105+0.9YY=R105+0.9Y+R108Y-0.9Y=R2130.1Y=R213Y=R213/0.1=R2130

(4) 1/4

.Net investment < gross investment

The answer is A.