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प्रश्न
Define 'or' explain the following concept.
Propensity to save
उत्तर
The propensity to save depends upon the level of income. This is because a person can save more if his income increases. When level of income increases more than minimum required level of consumption and expenditure, a person will not spend more on consumption therefore his ability and desire to save more will increase.
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संबंधित प्रश्न
Distinguish between marginal propensity to consume and average propensity to consume. Give a numerical example.
Define marginal propensity to consume
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 investment expenditure:
National Income =1,000
Autonomous Consumption =100
Marginal propensity to consume =0.8
Suppose marginal propensity to consume is 0.8. How much increase in investment is required to increase national income by Rs. 2000 crore? Calculate.
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.
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. From the following data about an economy calculate autonomous consumption.
1) Income = 500
2) Marginal propensity to save = 0.2
3) Investment expenditure = 800
Assuming that increase in investment is Rs1000 crore and marginal propensity to consume is 0.9, explain the working of the multiplier.
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. From the following data, calculate the marginal propensity to save:
1) Income = 10,000
2) Autonomous consumption = 500
3) Consumption expenditure = 8,000
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. Calculate the National Income from the following :
Autonomous Consumption = 120
Marginal Propensity to Save = 0.2
Investment Expenditure = 150
Explain the Keynesian psychological law of consumption.
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
State and explain J.M. Keynes's ‘psychological law of consumption’.
Define or explain the following concept.
Autonomous Consumption.
Write explanatory answer:
Explain the subjective and objective factors determining consumption function.
Define or explain the concept Average propensity to save .
Fill in the blank with appropriate alternatives given in the bracket:
The part of income not spent is________.
Give reasons or explain the following statement:
Income which is not saved is consumption.
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 |
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(6) | Inelastic demand | |
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(7) | Luxurious commodities |
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(8) | Dr. Marshall |
Explain the following concepts or give definitions.
Consumption
Distinguish between Average propensity to consume and Marginal propensity to consume.
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.
Answer the following question.
In an economy, investment increased by 1,100 and as a result of it income increased by 5,500. Had the marginal propensity to save been 25 percent, what would have been the increase in income?
In a hypothetical economy, Mr. Neeraj has deposited ₹100 in the bank. If it is assumed that there is no other currency circulation in the economy, then the total money supply in the economy will be ____________.
MPC = MPS = ?
Which or is true?
Which of the following is correct?
The relation between consumption and savings are ______
______ buy goods and services for consumption and also supply factors of production.
A firm is able to sell any quantity of a good at a given price. The firm's Marginal Revenue will be ______
Which of the following points establish the relationship between MPS and MPC?
If MPC is 0.9, what is the value of the multiplier? How much investment is needed to increase national income by Rs 5,000 Crores
In an economy, 75 percent of the increase in income is spent on consumption. Investment is increased by Rs 1,000 crore. Calculate the Total increase in income?
The simplest consumption function assumes ______
If the value of Average Propensity to Save (APS) is 0.2 and National Income is ₹4,000 crores, then consumption will be ______
If the marginal propensity to consume is greater than marginal propensity to save, the value of the multiplier 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 |
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)?
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 |
If increase in National Income is equal to increase in consumption, identity the value of Marginal Propensity to Save:
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.
'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.
Assertion (A): At the break-even level of income, the value of Average Propensity to Consume (APC) is zero.
Reason (R): Sum of Average Propensity to Consume (APC) and Average Propensity to Save (APS) is always equal to one.
The value of ______ can be greater than one.
How is APS obtained from the APC?
