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

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

Team Careers360 · Accepted Answer

Correct Answer: 8000

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

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

$K=4$

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

$4=\frac{\Delta Income}{2000}$

${\Delta Income}= 8000 \, crore$

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

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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: 5000Option 2: 6000Option 3: 7000Option 4: 8000

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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. 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

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 : 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

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