Question

1. An increase of 7 200 crores in investment leads to a rise in national income by 1,000
crores. Find out marginal propensity to consume.
​

Answer 1

Answer:

Marginal Propensity to Consume 'MPC' = 0.80

answer:

Multiplier (k)=Change in Income(ΔY)Change in Investment(Δl)=1,000200=5

We know, Multiplier (k)=11−MPC

5=11−MPC

Hence ,MPC will be =1−0.20=0.80

Explanation:

hope it's helpful