Your firm needs a machine which costs $240,000, and requires $39,000 in maintenance for each year of its 7 year life. After 3 ye
1 answer:
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Answer:
option (c) $25 million
Explanation:
Data provided in the question:
The marginal propensity to consume in Frugalia, MPC = 0.60
Increase in spending = $10 million
Now,
The total increase in income
= × Increase in spending
on substituting the respective values, we get
= × $10 million
= × $10 million
or
= 2.5 × $10 million
or
= $25 million
Hence,
The answer is option (c) $25 million