Question : In an economy, 75% of increased income is spent on consumption if Rs.4 crore are invested in a project, find out the increase in income.
Option 1: 1600
Option 2: 1300
Option 3: 1400
Option 4: 1500

Question

Question : In an economy, 75% of increased income is spent on consumption if Rs.4 crore are invested in a project, find out the increase in income.

Option 1: 1600

Option 2: 1300

Option 3: 1400

Option 4: 1500

Team Careers360 · Accepted Answer

Correct Answer: 1600

Solution : $MPC= 0.75$

$K= \frac{1}{1-MPC}$

$K= \frac{1}{1-0.75}$

$K= 4$

$K= \frac{\Delta Income}{\Delta Investment}$

$4= \frac{\Delta Income}{4}$

${\Delta Income}= 1600\, crore$

$Hence, Option A\, is\, correct.$

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Question : In an economy, 75% of increased income is spent on consumption if Rs.4 crore are invested in a project, find out the increase in income.Option 1: 1600Option 2: 1300Option 3: 1400Option 4: 1500

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Question : In an economy, 75% of increased income is spent on consumption if Rs.4 crore are invested in a project, find out the increase in income.
Option 1: 1600
Option 2: 1300
Option 3: 1400
Option 4: 1500

Question : In an economy, 75% of increased income is spent on consumption if Rs.4 crore are invested in a project, find out the increase in savings.
Option 1: 500
Option 2: 800
Option 3: 1000
Option 4: 400

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 : The value of consumption in an economy would be ____ if national income of the economy is 2000 crore and the ratio between APC and APS is 3:2.
Option 1: 1500
Option 2: 1400
Option 3: 1300
Option 4: 1200

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 consumption expenditure.
Option 1: 3000
Option 2: 1500
Option 3: 2000
Option 4: 1000

Question : The saving function of an economy is given as S=-40+0.5Y. Calculate the total increase in income if investment expenditure increases by Rs. 600 crore.
Option 1: 1100
Option 2: 1200
Option 3: 1300
Option 4: 1400