Advertisements
Advertisements
प्रश्न
Calculate the change in final income, if Marginal Propensity to Consume (MPC) is 0.8 and change in initial investment is ₹ 1,000 crores.
उत्तर
The marginal propensity to consume = 0.8
The change in the initial investment = Rs 1000
Multiplier K = `1/(1-MPC)`
= `1/(1-0.8)`
= 5
Multiplier K = `"change in income"/"change in investment"`
`5 = "change in income"/1000`
Change in income = 1000 x 5 = Rs 5000.
APPEARS IN
संबंधित प्रश्न
Find equilibrium national income:
Autonomous consumption expenditure = 120
Marginal propensity to consume = 0.9
Investment expenditure = 1100
An economy is in equilibrium. Calculate the Investment Expenditure from the following
National Income = 800
Marginal propensity to save = 0.3
Autonomous Consumption = 100
Explain the Keynesian psychological law of consumption.
Complete the following table:
|
Consumption expenditure (Rs) |
Savings (Rs) |
Income (Rs) |
Marginal propensity to Consume |
|
100 |
50 |
150 |
|
|
175 |
75 |
……. |
…… |
|
250 |
100 |
……. |
…… |
|
325 |
125 |
……. |
…… |
Distinguish between :
Propensity to consume and Propensity to save.
Choose the correct answer :
The income which is not spent on consumption is known as _________.
Match the following Group ‘A’ with Group ‘B’:
| Group ‘A’ | Group ‘B’ | ||
| (a) | Giffen’s goods | (1) | Uses of commodities |
| (b) | Essential commodities | (2) | Keynes |
| (c) | Consumption | (3) | Primary function of bank |
| (d) | Consumption function | (4) | Inferior goods |
| (e) | Accept deposits | (5) | Money lender |
|
|
(6) | Inelastic demand | |
|
|
|
(7) | Luxurious commodities |
|
|
|
(8) | Dr. Marshall |
Explain the following concepts or give definitions.
Consumption
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)
Which one is correct?
Calculate equilibrium level of income for a hypothetical economy, for which it is given that:
- Autonomous Investments = ₹ 500 crores, and
- Consumption function, C = 100 + 0.80Y
MPC = 1 − MPS. It is ______
If MPC is less than one, it follows that ______
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
The rate of increase in ______ due to a unit increment in income is called marginal propensity to consume.
What is saving per Income called?
If the marginal propensity to consume is greater than marginal propensity to save, the value of the multiplier will be:
Income rises from ₹50,000 to ₹60,000, consumption increases from ₹40,000 to ₹48,000. In this situation, what will be the value of Marginal Propensity to Consume (MPC)?
Assertion (A): Saving curve makes a negative intercept on the vertical axis at zero level of income.
Reason (R): Saving function refers to the functional relationship between saving and income.
