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An economy is in equilibrium. Find investment expenditure:
National Income =1,000
Autonomous Consumption =100
Marginal propensity to consume =0.8
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Suppose marginal propensity to consume is 0.8. How much increase in investment is required to increase national income by Rs. 2000 crore? Calculate.
Marginal propensity to consume + marginal propensity to save ......................... '
(zero \ one \ less \ more)
Distinguish between marginal propensity to consume and average propensity to consume. Give a numerical example.
In an economy an increase in investment by Rs 100 crore led to ‘increase’ in national by Rs 1000 crore. Find marginal propensity to consume.
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