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12th Class Economics Solved Paper - Economics 2016 Outside Delhi Set-I

  • question_answer
    An economy is in equilibrium. Calculate Marginal Propensity to consume:
    National income = 1000
    Autonomous consumption expenditure = 200
    Investment expenditure = 100

    Answer:

                National income = 1000
                Autonomous consumption expenditure = 200
                Investment expenditure =100
                National Income = consumption + Investment Expenditure
                            \[Y=C+cY+I\]
                            \[1000=200+c\,\,(1000)+100\]
                            \[1000=300+c(1000)\]
                            \[1000300=c(1000)\]
                            \[700=c\,(1000)\]
                            \[c=700/1000\]
                            \[c=0.7\]
    Marginal propensity to consume = 0.7.


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