Advertisements
Advertisements
Question
An economy is in equilibrium. From the following data about an economy, calculate investment expenditure:
1) Income = 10000
2) Marginal propensity to consume = 0.9
3) Autonomous consumption = 100
Solution
Given that
Income(Y) = 10,000
MPC (c) = 0.9
Autonomous Consumption `(barC)` = 100
Aswe know that
Y = C + l
C = C + cY
By substituting the values,we get
C = 100 + 0.9
C = 9100
Y = C + l
l = 10,000 - 9,100
l = 900
APPEARS IN
RELATED QUESTIONS
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. Calculate national income from the following :
Autonomous consumption = 100
Marginal propensity to save = 0.2
Investment expenditure = 200
An economy is in equilibrium. Calculate the Investment Expenditure from the following
National Income = 800
Marginal propensity to save = 0.3
Autonomous Consumption = 100
Write explanatory answer:
Explain the subjective and objective factors determining consumption function.
Define or explain the concept Average propensity to save .
Choose the correct answer :
When income increases consumption and saving will _________.
Write short note on:
Paradox of value
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 ____________.
If the income is ₹ 400 crores and consumption is ₹ 250 crores, what will be the APC?
The relation between APC and MPC in Keynes Psychological consumption function is ______.
Calculate Change in Income (ΔY) for a hypothetical economy. Given that:
- Marginal Propensity to Consume (MPC) = 0.8, and
- Change in Investment (ΔI) = Rs. 1,000 crores
Marginal Propensity to Save is equal to ______
Which of the following points are related to The sum of MPC and MPS is always equal to autonomous investments?
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?
What is "MPS" or the 'marginal propensity' to save?
The simplest consumption function assumes ______
What is saving per Income called?
When National Income rises from ₹ 600 Cr. to ₹ 1000 Cr., the consumption expenditure increases from ₹ 500 Cr. to ₹ 800 Cr. Calculate MPC and hence the value of Investment Multiplier.
APC can be greater than one, but MPC is always less than one. Give a reason to justify this phenomenon.
