Government decides to increase the expenditure on giving subsidies to the farmers by Rs. 10 crore. As per a team of experts instead of giving subsidies, government should increase spending of Rs.10 crore on building the cold storages and roads. Use the concept of multiplier to explain you are in favour of which type of spending: on subsides or cold storages and roads? Let’s assume MPC is 0.8 and t=.25 and Y0= Rs. 600 crore. Use diagrams to explain your answer.
Government decides to increase the expenditure on giving subsidies to the farmers by Rs. 10 crore. As per a team of experts instead of giving subsidies, government should increase spending of Rs.10 crore on building the cold storages and roads. Use the concept of multiplier to explain you are in favour of which type of spending: on subsides or cold storages and roads? Let’s assume MPC is 0.8 and t=.25 and Y0= Rs. 600 crore. Use diagrams to explain your answer.
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Government decides to increase the expenditure on giving subsidies to the farmers by
Rs. 10 crore. As per a team of experts instead of giving subsidies, government should
increase spending of Rs.10 crore on building the cold storages and roads. Use the
concept of multiplier to explain you are in favour of which type of spending: on
subsides or cold storages and roads? Let’s assume MPC is 0.8 and t=.25 and Y0= Rs.
600 crore. Use diagrams to explain your answer.
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