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

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

Team Careers360 · Accepted Answer

Correct Answer: 0.25

Solution : $K=\frac{\Delta Income}{\Delta Investment}= \frac{600}{150}= 4\ 4=\frac{1}{1-MPC}\ MPC=\frac{3}{4}\, or \, 0.75. \ MPC+MPS=1\, \MPC= 0.75, MPS= 0.25\ Hence, Option\, B\, is\, correct.$

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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: 0.35Option 2: 0.25Option 3: 0.65Option 4: 0.75

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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 : 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. 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 : 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 : In an economy, the marginal propensity to consume is 0.75. If the investment increases by Rs.2000 crore, calculate the total increase in income.
Option 1: 5000
Option 2: 6000
Option 3: 7000
Option 4: 8000

Question : The equilibrium level of income in an economy is Rs. 3000 crore. The autonomous consumption expenditure is equal to Rs.250 crore and investment expenditure is Rs.1000 crore. Calculate marginal propensity to save.
Option 1: 0.42
Option 2: 0.58
Option 3: 0.32
Option 4: 0.65