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

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Question : 4
Total: 21
An Economy is in equilibrium, calculate the Marginal Propensity to Save (MPS) from the following:
(i) National Income (Y) =4,400
(ii) Autonomous Consumption (C)=1,000
(iii) Investment Expenditure (I) =70
Solution:  
MPS = ?
National Income (Y)=4400
Autonomous Consumption (C)=1000
Investment Expenditure (I)=70
Y=C+I
4400=C+70
C=4330
C=C+bY
4330=1000+b(4400)
(43301000)=4400b
3330
4400
=b

(MPC)b=0.76
MPS=1MPC
=10.76
=0.24
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