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प्रश्न
Answer the following question.
Which of the two, average propensity to consume or average propensity to save, can be negative, and why?
उत्तर
Average Propensity to Save can be negative. It is negative in the situation when savings are negative or when consumption is greater than income ( When past savings are used for consumption). Average Propensity to Consume can never be negative because is the ratio of consumption and income and consumption can never be negative.
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संबंधित प्रश्न
Distinguish between marginal propensity to consume and average propensity to consume. Give a numerical example.
An economy is in equilibrium. Find investment expenditure:
National Income =1,000
Autonomous Consumption =100
Marginal propensity to consume =0.8
An economy is in equilibrium. From the following data about an economy, calculate investment expenditure:
1) Income = 10000
2) Marginal propensity to consume = 0.9
3) Autonomous consumption = 100
Write explanatory answer
State and explain J.M. Keynes's ‘psychological law of consumption’.
Explain the following concepts or give definitions.
Consumption
Give reason or explain the following statement
Demand for necessary goods is inelastic.
Answer the following question.
What is meant by autonomous consumption? Explain with the help of a diagram.
Suppose in a hypothetical economy, the income rises from ₹ 5,000 crores to ₹ 6,000 crores. As a result, the consumption expenditure rises from ₹ 4,000 crores to ₹ 4,600 crores. Marginal propensity to consume in such a case would be __________.
Answer the following question.
In an economy, investment increased by 1,100 and as a result of it income increased by 5,500. Had the marginal propensity to save been 25 percent, what would have been the increase in income?
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)
In a hypothetical economy, Mr. Neeraj has deposited ₹100 in the bank. If it is assumed that there is no other currency circulation in the economy, then the total money supply in the economy will be ____________.
APC + APS = ?
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
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
Which of the following points are related to The sum of MPC and MPS is always equal to autonomous investments?
Identify the correctly matched pair from Column A to that of Column B:
| Column A | Column B | ||
| (1) | MPC | (a) | Ratio of Savings to Consumption |
| (2) | APC | (b) | Ratio of Consumption to Income |
| (3) | APS | (c) | Ratio of Consumption to Savings |
| (4) | MPS | (d) | Ratio of Savings to Investment |
If in an economy, the value of investment multiplier is 4 and Autonomous Consumption is ₹ 30 Crore, the relevant consumption function would be :
The value of ______ can be greater than 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).
