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प्रश्न
If the marginal propensity to consume is greater than marginal propensity to save, the value of the multiplier will be (Choose the correct alternative)
(a) greater than 2
(b) less than 2
(c) equal to 2
(d) equal to 5
उत्तर
greater than 2
When MPC >MPS, then the value of multiplier will be greater than 2 because the value of the multiplier is directly related to the value of marginal propensity to consume. They both are directly related. In other words when MPC is more, k the multiplier is more and vice versa.
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संबंधित प्रश्न
Calculate investment expenditure from the following data about an economy which is in equilibrium:
National income = 1000
Marginal propensity to save = 0.25
Autonomous consumption expenditure = 200
Complete the following table:-
| Income (Rs) | Consumption expenditure (Rs) | Marginal propensity to save | Average propensity to save |
| 0 | 80 | ||
| 100 | 140 | 0.4 | ....... |
| 200 | ........ | ...... | 0 |
| ....... | 240 | ........ | 0.20 |
| ......... | 260 | 0.8 | 0.35 |
An economy is in equilibrium. Find autonomous consumption expenditure:
National Income =1,600
Investment Expenditure = 300
Marginal Propensity to Consume= 0.8
An economy is in equilibrium. From the following data calculate autonomous consumption.[4]
(i) Income = 10,000
(ii) Marginal propensity to consume = 0.2
(iii) Autonomous consumption = 1,500
An economy is in equilibrium. Calculate the Marginal Propensity to Save from the following:
National Income = 1000
Autonomous Consumption = 100
Investment = 120
Answer the following question :
Explain the development and non-development expenditures of government .
Explain the following concepts or give definitions.
Consumption
State whether the following statements are True or False with reasons:
Increase in consumption expenditure is less than increase in income.
Define or explain the following concept
Marginal Cost.
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.
Which of the two, average propensity to consume or average propensity to save, can be negative, and why?
The relation between APC and MPC in Keynes Psychological consumption function is ______.
Which one is correct?
The value of MPC is ______
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 points are related to The sum of MPC and MPS is always equal to autonomous investments?
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 |
Identify the correctly matched pair from Column A to column B:
| Column A | Column B |
| (1) MPC = 0 | (a) K > 1 |
| (2) MPC = 1 | (b) K = Infinity |
| (3) MPC < 1 | (c) K = 0 |
| (4) MPC > MPS | (d) K < 1 |
In an economy 75 percent of the increase in income is spent on consumption. Investment increased by ₹ 1,000 crore.
Calculate the total increase in income on the basis of given information.
'Consumption function curve of an involuntary unemployed workers start from some positive level on Y-axis even at zero level of Income'. Justify the given statement.
