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Question
Calculate MPC, MPS and APC from the following data:
| Income | Consumption |
| (₹) | (₹) |
| 100 | 95 |
| 110 | 104 |
Numerical
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Solution
MPC = `(ΔC)/(ΔY)`
ΔC = Change in consumption = 104 - 95 = 9
ΔY = Change in income = 110 - 100 = 10
MPC = `9/10`
= 0.9
MPS = 1 − MPC
= 1 - 0.9
= 0.1
APC = `C/Y`
At an income of ₹ 100:
APC = `95/100`
= 0.95
At an income of ₹ 110:
APC = `104/110`
= 0.945
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Chapter 12: Theory of Income and Employment - NUMERICAL QUESTIONS [Page 232]
