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In an Economy an Increase in Investment by Rs 100 Crore Led to ‘Increase’ in National By Rs 1000 Crore. Find Marginal Propensity to Consume. - Economics

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प्रश्न

In an economy an increase in investment by Rs 100 crore led to ‘increase’ in national by Rs 1000 crore. Find marginal propensity to consume.

उत्तर

Given that

Change in investment (ΔI)=Rs 100crore

Change in income(ΔY) = Rs 1,000crore

We know that

`1/(1-MPC) " where MPC is equal to marginal propensity to consume"`

`1/(1-MPC)=1000/100=10`

1=10-10MPC

10MPC=9

MPC=0.9

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2015-2016 (March) Delhi Set 3

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