CBSE 2019 Class 12 Economics Outside Delhi Set 2

Question : 1

Total: 5

SECTION - B

(MACRO-ECONOMICS)

Estimate the change in initital investment if Marginal Propensity to Save (MPS) is 0.10 and change in final income is ₹15,000 crores.

Solution:

‌ MPS ‌‌=0.10
‌ Change in Income ‌‌=₹15,000‌ crores ‌
‌ Multiplier ‌(K)‌=‌

MPS

‌=‌

0.10

‌=10
K‌=‌

‌ Change in income ‌∆Y

‌ Change in investment ‌∆I.

10‌=‌

15,000

‌ Change in investment ‌

Change in investment =₹1500 crores.

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