Question : An increase in investment by Rs.200 leads to increase in national income by Rs.1400 crore. Calculate marginal propensity to consume.
Option 1: 0.45
Option 2: 0.35
Option 3: 0.85
Option 4: 0.65

Question

Question : An increase in investment by Rs.200 leads to increase in national income by Rs.1400 crore. Calculate marginal propensity to consume.

Option 1: 0.45

Option 2: 0.35

Option 3: 0.85

Option 4: 0.65

Team Careers360 · Accepted Answer

Correct Answer: 0.85

Solution : $K=\frac{1400}{200}\ \ K=7\ \ K=\frac{1}{1-MPC} \ \ 7=\frac{1}{1-MPC}\ \ MPC= 0.85\ \ Hence, Option \, C\, is\, correct.$

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Question : An increase in investment by Rs.200 leads to increase in national income by Rs.1400 crore. Calculate marginal propensity to consume.Option 1: 0.45Option 2: 0.35Option 3: 0.85Option 4: 0.65

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Question : An increase in investment by Rs.200 leads to increase in national income by Rs.1400 crore. Calculate marginal propensity to consume.
Option 1: 0.45
Option 2: 0.35
Option 3: 0.85
Option 4: 0.65

Question : An increase in investment by Rs.500 leads to increase in national income by Rs.2000 crore. Calculate marginal propensity to consume.
Option 1: 5
Option 2: 4
Option 3: 3
Option 4: 5

Question : An increase in investment by Rs. 400 leads to increase in national income by Rs. 2000 crore. Calculate marginal propensity to consume.
Option 1: 0.80
Option 2: 0.75
Option 3: 0.60
Option 4: 0.50

Question : As a result of increase in investment by Rs.150 crore, national income increases by Rs.600 crore. Calculate marginal propensity to save.
Option 1: 0.35
Option 2: 0.25
Option 3: 0.65
Option 4: 0.75

Question : In an economy, marginal propensity to consume is 0.80. If investment expenditure is increased by Rs.400 crore, calculate the total increase in income.
Option 1: 1000
Option 2: 2000
Option 3: 1400
Option 4: 1600

Question : In an economy, investment has increased by Rs.250 crore. If marginal propensity to consume is 3/5, calculate increase in national income.
Option 1: 500
Option 2: 600
Option 3: 625
Option 4: 800