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If increase in National Income is equal to increase in Savings, the value of Marginal Propensity to Consume would be ______ . - Economics

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प्रश्न

If increase in National Income is equal to increase in Savings, the value of Marginal Propensity to Consume would be ______.

विकल्प

  • equal to unity

  • greater than one

  • less than one

  • equal to zero

MCQ
रिक्त स्थान भरें

उत्तर

If increase in National Income is equal to increase in Savings, the value of Marginal Propensity to Consume would be equal to zero.

Explanation:

Increase in National Income = Increase in Saving 

Or 

ΔY = ΔS

We Know that = ΔY = ΔC + ΔS

 ΔY - ΔS = ΔC

ΔY - ΔY = ΔC 

(Because here, ΔY = ΔC)

0 = ΔC 

Now,       MPC = `"ΔC"/"ΔY"`= `0/"ΔY"` = 0

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