Test Index

CBSE 2016 Class 12 Economics Delhi Set-2

© examsnet.com
Question : 1
Total: 3
SECTION-B
(Macro-economics)

Suppose marginal propensity of consume is 0.8 . How much increase in investment is required to increase national income by ₹2000 crore? Calculate.
Solution:  
Marginal propensity to consume (MPC)=0.8
Change in income =₹2000 crore
k‌=1∕1−MPC
‌=1∕1−0.8=1∕0.2=5
k‌=∆Y÷∆I
5‌=2000÷∆I
5∆I‌=2000
∆I‌=‌
2000
5

∆I‌=400‌ crores ‌
© examsnet.com
Go to Question:
Next Question