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Suppose Marginal Propensity to Consume is 0.8. How Much Increase in Investment is Required to Increase National Income by Rs. 2000 Crore? Calculate. - Economics

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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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2015-2016 (March) Delhi Set 2

व्हिडिओ ट्यूटोरियलVIEW ALL [1]

संबंधित प्रश्‍न

Marginal propensity to consume + marginal propensity to save ......................... '

(zero \ one \ less \ more)


Define marginal propensity to consume


An economy is in equilibrium. Calculate Marginal Propensity to Consume :

National income = 1000

Autonomous consumption expenditure = 200

Investment expenditure = 100


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


Calculate Marginal Propensity to Consume from the following data about an economy

Which is an equilibrium:

National income = 2000

Autonomous Consumption expenditure = 200

Investment expenditure = 100


Distinguish between :

Propensity to consume and Propensity to save.


Distinguish between Average propensity to consume and Marginal propensity to consume.

 


Answer the following question.
State the objective factors determining consumption function.


Answer the following question.
What is meant by autonomous consumption? Explain with the help of a diagram.


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? 


What will be APC when APS = 0?


APC + APS = ?


The sum of MPC and MPS is always equal to _____


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Why public goods must be provided by the government?


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

If the value of Average Propensity to Save (APS) is 0.2 and National Income is ₹4,000 crores, then consumption 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)?


Complete the following table:

INCOME
(Y)
SAVING
(S)
APC
0 (-) 12  
20 6  

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