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प्रश्न
Suppose marginal propensity to consume is 0.8. How much increase in investment is required to increase national income by Rs. 2000 crore? Calculate.
उत्तर
Giventhat
MPC = 0.8
ΔY = Rs 2000 crore
We know that
`K=1/(1-MPC)=1/(1-0.8)=5`
`K=(DeltaY)/(DeltaI)`
`K=2000/(DeltaI)`
ΔI = Rs 400 crore
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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 autonomous consumption expenditure:
National Income =1,600
Investment Expenditure = 300
Marginal Propensity to Consume= 0.8
The value of marginal propensity to consume is 0.6 and initial income in the economy is Rs 100 crores. Prepare a schedule showing Income, Consumption and Saving. Also show the equilibrium level of income by assuming autonomous investment of Rs 80 crores.
An economy is in equilibrium. Calculate the Marginal Propensity to Save from the following:
National Income = 1000
Autonomous Consumption = 100
Investment = 120
An economy is in equilibrium. Find the Investment Expenditure from the following :
National Income = 750
Autonomous Consumption = 200
Marginal Propensity to Save = 0.4
Write explanatory answer:
Explain the subjective and objective factors determining consumption function.
Write answers in ‘one’ or ‘two’ paras each :
Explain the concept of saving function.
Give reason or explain the following statement
Demand for necessary goods is inelastic.
The consumption function of an economy is : C = 40 + 0.8 Y (amount in ₹ crores). Determine that level of income where the average propensity to consume will be one.
An economy is in equilibrium. From the following data calculate investment expenditure :
(i) Marginal propensity to consume = 0·9
(ii) Autonomous consumption = 200
(iii) Level of income = 10000
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)
If the income is ₹ 400 crores and consumption is ₹ 250 crores, what will be the APC?
Complete the following schedule -
| Y | C | APC | MPC |
| 100 | 90 | ? | ? |
| 120 | 108 | ? | ? |
Which of the following points are related to The sum of MPC and MPS is always equal to autonomous investments?
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 |
The rate of increase in ______ due to a unit increment in income is called marginal propensity to consume.
If the value of Average Propensity to Save (APS) is 0.2 and National Income is ₹4,000 crores, then consumption will be ______
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 |
APC can be greater than one, but MPC is always less than one. Give a reason to justify this phenomenon.
