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प्रश्न
An economy is in equilibrium. From the following data, calculate the marginal propensity to save:
1) Income = 10,000
2) Autonomous consumption = 500
3) Consumption expenditure = 8,000
उत्तर
8,000 = 500 + C x 10,000
7,500 = 10,000C
C = 0.75
MPC = 0.75
We Know
MPS = 1 - 0.75
∴ MPS = 0.25
APPEARS IN
संबंधित प्रश्न
An economy is in equilibrium. Calculate Marginal Propensity to Consume :
National income = 1000
Autonomous consumption expenditure = 200
Investment expenditure = 100
Find equilibrium national income:
Autonomous consumption expenditure = 120
Marginal propensity to consume = 0.9
Investment expenditure = 1100
An economy is in equilibrium. Calculate Autonomous Consumption from the following :
National Income = 1,250
Marginal Propensity to Save = 0.2
Investment Expenditure = 150
State whether the following statements are True or False with reasons:
Increase in consumption expenditure is less than increase in income.
Write answers in ‘one’ or ‘two’ paras each :
Explain the concept of saving function.
Answer the following question.
What is meant by autonomous consumption? Explain with the help of a diagram.
Answer the following question.
Which of the two, average propensity to consume or average propensity to save, can be negative, and why?
If in an economy :
Change in initial Investment (∆I) = ₹ 700 crores
Marginal Propensity to Save (MPS) = 0.2
(a) Investment Multiplier (k)
(b) Change in final income (∆Y)
Calculate the change in final income, if Marginal Propensity to Consume (MPC) is 0.8 and change in initial investment is ₹ 1,000 crores.
The relation between consumption and savings are ______
Complete the following schedule -
| Y | C | APC | MPC |
| 100 | 90 | ? | ? |
| 120 | 108 | ? | ? |
Calculate Change in Income (ΔY) for a hypothetical economy. Given that:
- Marginal Propensity to Consume (MPC) = 0.8, and
- Change in Investment (ΔI) = Rs. 1,000 crores
Which of the following statement is true?
Calculate Autonomous Consumption expenditure from the following data about an economy which is in equilibrium:
National Income = Rs 1,200
Marginal Propensity to Save = 0.20
Investment expenditure = Rs 100
The sum of MPC and MPS is always equal to _____
Identify the correct pair of from the following Columns I and II:
| Columns I | Columns II |
| 1. Total Product increases at an increasing rate and Marginal Product rises till it reaches its maximum point. | (a) Second Stage |
| 2. Total product increases at a decreasing rate and reaches maximum, and MP becomes zero. | (b) First Stage |
| 3. Total product also decreases and marginal product (MP) becomes negative. | (c) Third Stage |
| 4. Improvement in technique of production and discovery of fixed factor substitute can postpone the operation of law for some time. | (d) Fourth Stage |
Assertion (A): Saving curve makes a negative intercept on the vertical axis at zero level of income.
Reason (R): Saving function refers to the functional relationship between saving and income.
Assertion (A): At the break-even level of income, the value of Average Propensity to Consume (APC) is zero.
Reason (R): Sum of Average Propensity to Consume (APC) and Average Propensity to Save (APS) is always equal to one.
For a hypothetical economy, the government incurs an investment expenditure of ₹ 1,000 crore. If the value of Marginal Propensity to Save (MPS) falls from 0.25 to 0.10. Calculate the value of increase in income due to change in the value of Marginal Propensity to Save (MPS).
What is meant by autonomous consumption expenditure? Show it on a diagram.
