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

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

Team Careers360 · Accepted Answer

Correct Answer: 2000

Solution : $MPC=0.80\K=\frac{1}{1-MPC}\ K=\frac{1}{1-0.80}=5\ K=\frac{\Delta Income}{\Delta Investment}\ 5=\frac{\Delta Income}{400}\ \Delta Y= 2000 \, crore\ Hence, Option \, B\, is\, correct.$

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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: 1000Option 2: 2000Option 3: 1400Option 4: 1600

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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 : 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, 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 : 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.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, 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