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Question
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)?
Options
0.80
0.20
0.10
0.90
MCQ
Solution
0.80
Explanation:
MPC = `(Δ"C")/(Δ"Y")`
= `(8,000)/(10,000)`
= 0.8
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