Question : _____________________ is defined as ratio of change in consumption to change in total income

Option 1: Marginal propensity to consume

Option 2: Marginal propensity to save

Option 3: Average propensity to consume

Option 4: Average propensity to save.

Question : An economy, the equilibrium level of income is Rs.12500. The ratio of marginal propensity to consume and marginal propensity to save is 4:1. Calculate the additional investment needed to reach a new equilibrium level of income of Rs.20,000 crore.

Option 1: 600

Option 2: 800

Option 3: 1200

Option 4: 1000

Question : __________________________ refers to the consumption expenditure to the corresponding level of income.
 

Option 1: Average propensity to consume
 

Option 2: Marginal propensity to consume
 

Option 3: Average propensity to save
 

Option 4: None of the above.
 

Question : If the marginal propensity to consume is denoted by c, then the government expenditure multiplier can be expressed as _______.

Option 1: c

Option 2: 1/1-c

Option 3: 1/c

Option 4: -1/c

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