Test Index

CBSE 2016 Class 12 Economics Outside Delhi Set-1

© examsnet.com
Question : 9 of 19
Marks: +1, -0
An economy is in equilibrium. Calculate Marginal Propensity to consume :
National income =1000=1000
Autonomous consumption expenditure =2 0 0=2\ 0\ 0
Investment expenditure =100=100
Solution:  
National income =1000=1000
Autonomous consumption expenditure =200=200
Investment expenditure =100=100
National Income == Consumption + Investment Expenditure
Y  =c‾+cY+IY\;=\overline{c}+cY+I
1000  =200+c(1000)+1001000\;=200+c(1000)+100
1000  =300+c(1000)1000\;=300+c(1000)
1000−300  =c(1000)1000-300\;=c(1000)
700  =c(1000)700\;=c(1000)
c  =  7001000c\;=\;\frac{700}{1000}
c  =0.7c\;=0.7
Marginal propensity to consume =0.7=0.7 .
© examsnet.com
Go to Question:
Prev Question
Next Question