Advertisements
Advertisements
Question
Answer the following question :
Explain the development and non-development expenditures of government .
Solution
The government development and non-development expenditure are as follows :
(i) The government development expenditure is the expenditure that is incurred by it for the economic and social development of the country.
(ii) Expenditure on health, education, industrial development, social welfare, scientific research, etc. is considered as the government developmental expenditure.
(iii) The government non-development expenditure is the expenditure incurred on the essential service of the government.
(iv) Expenditure on administrative services, defence, judiciary, police, etc. is considered as the government non-developmental expenditure.
APPEARS IN
RELATED QUESTIONS
Distinguish between marginal propensity to consume and average propensity to consume. Give a numerical example.
Suppose marginal propensity to consume is 0.8. How much increase in investment is required to increase national income by Rs. 2000 crore? Calculate.
An economy is in equilibrium. Find marginal propensity to consume :
Autonomous consumption
Expenditure = 100
Investment expenditure = 100
National Income = 2,000
An economy is in equilibrium. Find autonomous consumption expenditure:
National Income =1,600
Investment Expenditure = 300
Marginal Propensity to Consume= 0.8
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
Define marginal propensity to save.
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. Find 'autonomous consumption' from the following:
National income = 1000
Marginal propensity to consume = 0.8
Investment expenditure = 100
An economy is in equilibrium. Find Marginal Propensity to Consume from the following:
National income = 2000
Autonomous consumption = 400
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
An economy is in equilibrium. Calculate the Marginal Propensity to Save from the following:
National Income = 1000
Autonomous Consumption = 100
Investment = 120
Complete the following table:
|
Consumption expenditure (Rs) |
Savings (Rs) |
Income (Rs) |
Marginal propensity to Consume |
|
100 |
50 |
150 |
|
|
175 |
75 |
……. |
…… |
|
250 |
100 |
……. |
…… |
|
325 |
125 |
……. |
…… |
Choose the correct answer :
When income increases consumption and saving will _________.
Answer the following question.
What is meant by a propensity to consume?
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?
Which one is correct?
Which of the following is correct?
Which of the following statement is true?
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?
The sum of MPC and MPS is always equal to _____
Which of the following points establish the relationship between MPS and MPC?
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 Consume (APC) is 0.8 and National Income is ₹4,000 crores, the value of savings will be ______.
If in an economy, the value of investment multiplier is 4 and Autonomous Consumption is ₹ 30 Crore, the relevant consumption function would be :
If increase in National Income is equal to increase in consumption, identity the value of Marginal Propensity to Save:
Complete the following table:
| INCOME (Y) |
SAVING (S) |
APC |
| 0 | (-) 12 | |
| 20 | 6 |
What is meant by autonomous consumption expenditure? Show it on a diagram.
