Based on the marginal propensity to save and the increase in investment spending, there will be an increase of $400 in equilibrium income.
This can be found as:
= Change in investment spending x Multiplier
Multiplier is:
= 1 / Marginal propensity to save
= 1 / 0.25
= 4
Change in equi. income is:
= 100 x 4
= $400
Find out more on the marginal propensity to save at https://brainly.com/question/26769701.
