CBSE 2016 Class 12 Economics Delhi Set-1

Question : 9 of 18

Marks: +1, -0

In an economy investment is increased by

₹ 300

crore. If marginal propensity to consume is

2 \/ 3

, calculate increase in national income.

Solution:

\;\text " MPC "\;\;=2 \/ 3

∆ {\I}\;=₹ 300 \;\text " crores "\;

{\k}\;=[1 ÷(1- {\MPC})]

\;= [1 ÷ (1-\;{2}/{3}) ]

\;{1}/{1- {\MPC}}\;=\;{1}/{1-\;{2}/{3}}

\;{1}/{{1}/{3}}\;=3

{\k}\;=\;{∆ {\Y}}/{∆ {\I}}

3\;=\;{∆ {\Y}}/{300}

∆ {\Y}\;=300 × 3

\;=₹ 900 \;\text " crore "\;

Increase in national income is

₹ 900

crore.

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