Explanation:

- The Marginal Propensity to Save (MPS) is the fraction of additional income that is saved.

- If MPS is 0.25, then the Marginal Propensity to Consume (MPC) is 1 - MPS, which is 0.75.

- The multiplier effect is calculated as 1 / (1 - MPC) = 1 / MPS.

- Therefore, the multiplier is 1 / 0.25, which equals 4.

- The formula for the final change in income is: Multiplier × Initial Change in Investment.

- The initial change in investment is Rs. 250 crores.

- Final change in income = 4 × 250 = Rs. 1,000 crores.

Option 1: 1,000 crores is correct.

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