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CBSE 2016 Class 12 Economics Delhi Set-2

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Question : 1 of 3
Marks: +1, -0
SECTION-B
(Macro-economics)
Suppose marginal propensity of consume is 0.80.8 . How much increase in investment is required to increase national income by ₹2000\text{₹} 2000 crore? Calculate.
Solution:  
Marginal propensity to consume (MPC)=0.8(MPC)=0.8
Change in income =₹2000= \text{₹} 2000 crore
k=11−MPCk = \frac{1}{1-MPC}
=11−0.8=10.2=5= \frac{1}{1-0.8} = \frac{1}{0.2} = 5
k=ΔY÷ΔIk = \Delta Y \div \Delta I
5=2000÷ΔI5 = 2000 \div \Delta I
5ΔI=20005 \Delta I = 2000
ΔI=20005\Delta I = \frac{2000}{5}
ΔI=400 crores \Delta I = 400 \text{ crores }
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