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

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

Team Careers360 · Accepted Answer

Correct Answer: 400

Solution : $MPC=0.75$

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

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

$K=4$

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

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

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

$MPS=\frac{\Delta Savings}{\Delta Income}$

$0.25=\frac{\Delta Savings}{1600}$

${\Delta Savings}= 400 \, crore.$

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

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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 savings.Option 1: 500Option 2: 800Option 3: 1000Option 4: 400

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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 savings.
Option 1: 500
Option 2: 800
Option 3: 1000
Option 4: 400

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 : The consumption expenditure and investment demand are Rs. 500 crores and Rs. 400 crore respectively when the income level is Rs. 1000 crores Calculate savings.
Option 1: 100
Option 2: 400
Option 3: 500
Option 4: 1000

Question : The consumption expenditure and investment demand are Rs. 500 crores and Rs. 400 crore respectively when the income level is Rs. 1000 crores. Calculate AS.
Option 1: 400
Option 2: 1000
Option 3: 500
Option 4: 1500

Question : In an economy, equilibrium level of income falls short by Rs.400 crore. Calculate the additional investment needed to achieve the equilibrium level of income, 80% of the increased income is spent on consumption.
Option 1: 70
Option 2: 80
Option 3: 90
Option 4: 100

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