If increase in National Income is equal to ...

CBSE 2023 Class 12 Economics Delhi Set 1

Question : 8 of 49

Marks: +1, -0

If increase in National Income is equal to increase in Savings, the value of Marginal Propensity to Consume would be _______.

(Fill up the blank with correct alternative)

Solution:

(d) equal to zero

Explanation:

Increase in National Income = Increase in Saving

\Delta Y=\Delta S

We Know that

\Delta Y=\Delta C+\Delta S

\;\Delta Y-\Delta S=\Delta C

\;\Delta Y-\Delta Y=\Delta C

(Because here,

\Delta Y=\Delta C

)

0=\Delta C

Now,

\mathrm{MPC}=\;\frac{\Delta C}{\Delta Y}=\;\frac{0}{\Delta Y}=0

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