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प्रश्न
In an economy, the value of Marginal Propensity to Save (MPS) is 0.25, what will be the value of increase in income, if investments increased by ₹ 200 crores?
पर्याय
₹ 200 crores
₹ 150 crores
₹ 1,000 crores
₹ 800 crores
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उत्तर
₹ 800 crores
Explanation:
Given: Increase in Investment = ΔI = 200 crore
MPS = 0.25
To Find: Increase in Income = ΔY =?
Here,
MPC + MPS = 1
MPC + 0.25 = 1
MPC = 1 - 0.25 = 0.75
Investment Multiplier = `k = 1/(1 - "MPC")`
=`1/(1 - 0.75) = 1/ (0.25)`
= 4
Now, `k = "ΔY"/"ΔI"`
4 = `"ΔY"/200`
`4xx200` = ΔY
ΔY = ₹ 800 crore
संबंधित प्रश्न
State the meaning of the following:
Autonomous Consumption
In equation C = a + by, the value of b lies between ______.
Consumption depends on ______
Aggregate Demand is not determined by which of the following.
"In an economy, the autonomous consumption is ₹ 100 and Marginal Propensity to Consume (MPC) is 0.6. If the equilibrium level of Income is 2,000, then the autonomous investment is ₹ 300." Justify the statement with valid calculation.
Read the following statements carefully:
Statement 1: The induced consumption shows, the direct relation between consumption and income.
Statement 2: With a certain increase in income, induced consumption also increases.
In the light of the given statements, choose the correct alternative from the following:
If in an economy, the Investment Multiplier is 4 and Autonomous Consumption is ₹ 30 crore, the relevant consumption function would be ______.
What does the consumption function show?
Which formula represents the consumption function?
How does the consumption curve begin and move as income changes?
What is induced consumption?
Which expression represents induced consumption in the consumption function?
Which formula correctly defines Marginal Propensity to Save (MPS)?
Which equation is equivalent to \[MPC+MPS=1\]?
What does \[APC=\frac{C}{Y}\] measure?
What does \[APS=\frac{S}{Y}\] measure?
What does it mean when the consumption curve is above the 45° line?
