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Solution - Consumption Function and Propensity to Save

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Distinguish between marginal propensity to consume and average propensity to consume. Give a numerical example.

Distinguish between Average Propensity to Consume and Marginal Propensity to consume using a numerical example.

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An economy is in equilibrium. Find marginal propensity to consume :

Autonomous consumption

Expenditure = 100

Investment expenditure = 100

National Income = 2,000

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Complete the following table:-

Income (Rs)Consumption expenditure (Rs)Marginal propensity to saveAverage propensity to save
080  
1001400.4.......
200..............0
.......240........0.20
.........2600.80.35
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Solution for concept: Consumption Function and Propensity to Save. For the courses 12th CBSE (Arts), 12th CBSE (Commerce), 12th CBSE (Science)
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