In the model, production is divided into two sectors: the consumer goods sector and the capital goods sector. It is assumed that ratio of 'increment of income to the increment in investment in consumer goods sector' is greater than the same ratio but for investment in capital goods sector. Why is this the case? If I invest 1 dollar in either sector, why is it not that income increases by 1 dollar in either case, using the fact that $Y=C+I$?


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