Question : The equilibrium level of income in an economy is Rs. 3000 crore. The autonomous consumption expenditure is equal to Rs.250 crore and investment expenditure is Rs.1000 crore. Calculate marginal propensity to save.
Option 1: 0.42
Option 2: 0.58
Option 3: 0.32
Option 4: 0.65

Question

Question : The equilibrium level of income in an economy is Rs. 3000 crore. The autonomous consumption expenditure is equal to Rs.250 crore and investment expenditure is Rs.1000 crore. Calculate marginal propensity to save.

Option 1: 0.42

Option 2: 0.58

Option 3: 0.32

Option 4: 0.65

Team Careers360 · Accepted Answer

Correct Answer: 0.42

Solution : $C=\bar c +bY \ \ 2000=250+b(3000) \ \ b=0.58 \ \ MPS=1-b= 1-0.58= 0.42 \ \ Hence, Option\, A\, is\, correct.$

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Question : The equilibrium level of income in an economy is Rs. 3000 crore. The autonomous consumption expenditure is equal to Rs.250 crore and investment expenditure is Rs.1000 crore. Calculate marginal propensity to save.Option 1: 0.42Option 2: 0.58Option 3: 0.32Option 4: 0.65

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Question : The equilibrium level of income in an economy is Rs. 3000 crore. The autonomous consumption expenditure is equal to Rs.250 crore and investment expenditure is Rs.1000 crore. Calculate marginal propensity to save.
Option 1: 0.42
Option 2: 0.58
Option 3: 0.32
Option 4: 0.65