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CBSE 2022 Class 12 Economics Delhi Set 1 (Term 2)

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Question : 4 of 21
Marks: +1, -0
An Economy is in equilibrium, calculate the Marginal Propensity to Save (MPS) from the following:
(i) National Income (Y) =₹4,400= \text{₹} 4,400
(ii) Autonomous Consumption (C‾)=₹1,000(\overline{C})=\text{₹} 1,000
(iii) Investment Expenditure (I)     =₹70\;\; = \text{₹} 70
Solution:  
   MPS   =   ?   \;\text{ MPS }\;=\;\text{ ? }\;
National Income (Y)=₹4400(Y)=\text{₹} 4400
Autonomous Consumption (C‾)=₹1000(\overline{C})=\text{₹} 1000
Investment Expenditure (I)=₹70(I)=\text{₹} 70
Y  =C+IY\;= C+ I
₹4400  =C+₹70\text{₹} 4400\;= C+\text{₹} 70
C  =₹4330C\;= \text{₹} 4330
C  =C‾+bYC\;= \overline{C}+b Y
4330  =1000+b(4400)4330\;=1000+b(4400)
(4330−1000)  =4400b(4330-1000)\;=4400 b
  33304400  =b\; \frac{3330}{4400} \;= b
(MPC)b  =0.76(\text{MPC}) b\;=0.76
MPS  =1−MPC\text{MPS}\;=1-\text{MPC}
  =1−0.76\;=1-0.76
  =0.24\;=0.24
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