Question

Estimate the value of MPC if :
(a) Autonomous Investment (I)= 100 crore
(b) National income (Y) = 4000 crore
(c) Autonomous Consumption (C)= 50 crore​

Answer 1

$\bf {Given :}$

Autonomous Investment  (I)= 100 National Income (Y)= 4000

Autonomous Consumption (C)= 50

Marginal Propensity of Consumption (MPC) =?

$\bf Formula : Y=C+MPC (Y)+I$

4000=50+MPC (4000)+100

MPC (4000)= 4000-150

MPC = 3850÷4000

$\bf MPC = 0.96$

Answer 2

Answer:

$\bf{Given}$

Autonomous Investment  (I)= 100 National Income (Y)= 4000

Autonomous Consumption (C)= 50

Marginal Propensity of Consumption (MPC) =?

$\bf Formula :$

Y=C+MPC (Y)+IFormula:Y=C+MPC(Y)+I

4000=50+MPC (4000)+100

MPC (4000)= 4000-150

MPC = 3850÷4000

$\bf MPC$

= 0.96MPC=0.96