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

Question

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

Team Careers360 · Accepted Answer

Correct Answer: 625

Solution : $MPC=\frac{3}{5} \, or \, 0.60\ K=\frac{1}{1-0.60}= \frac{1}{0.40}= 2.5\ K=\frac{\Delta Income}{\Delta Investment}\ 2.5= \frac{\Delta Income}{250}\ \Delta Income= 625 \, crore. \ Hence, Option \, C\, is\, correct.$

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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: 500Option 2: 600Option 3: 625Option 4: 800

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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

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.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 : 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