Question : _____________________ is defined as ratio of change in consumption to change in total income
Option 1: Marginal propensity to consume
Option 2: Marginal propensity to save
Option 3: Average propensity to consume
Option 4: Average propensity to save.
Correct Answer: Marginal propensity to consume
Solution : Marginal propensity to consume is defined as ratio of change in consumption to change in total income Hence, Option A is correct.
Question : __________________________ refers to the consumption expenditure to the corresponding level of income.
Question : The marginal propensity to consume (MPC) is defined as the:
Question : An economy, the equilibrium level of income is Rs.12500. The ratio of marginal propensity to consume and marginal propensity to save is 4:1. Calculate the additional investment needed to reach a new equilibrium level of income of Rs.20,000 crore.
Question : Given that national income is Rs.100 crore and consumption expenditure is Rs.72 crore, When income rises to Rs. 200 crore and consumption expenditure to Rs.108 crore, what will be the average propensity to consume and a marginal propensity to save?
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