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

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On the basis of following schedule, answer the given questions:
 Income (in ₹ crores)  Savings (in ₹ crores)
 0  -20
 50  -10
 100  0
 150  30
 200  60
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Question : 4 of 19
Marks: +1, -0
In an economy 75 percent of the increase in income is spent on consumption. Investment increased by ₹ 1,000\text{₹ }1,000 crore.
Calculate the total increase in income on the basis of given information.
Solution:  
MPC  =75%=0.75\text{MPC}\;=75\%=0.75
ΔI  =1,000\Delta I\;=1,000
ΔY  =?\Delta Y\;=?
K  =  11−MPCK\;=\;\frac{1}{1-\text{MPC}}
  =  11−0.75=  10.25=4\;=\;\frac{1}{1-0.75}=\;\frac{1}{0.25}=4
K  =  ΔYΔIK\;=\;\frac{\Delta Y}{\Delta I}
4  =  ΔY10004\;=\;\frac{\Delta Y}{1000}
4×1000  =ΔY4 \times 1000\;=\Delta Y
₹ 4,000  =ΔY\text{₹ }4,000\;=\Delta Y
Thus, the increase in income =₹ 4,000=\text{₹ }4,000 crores
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