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NextQ12

You are given the consumption function of an imaginary economy, C = 100 + 0.8 Y, where C = Consumption and Y = Income. Calculate : (i) The value of Marginal Propensity to Save (MPS) (ii) The level of income at Break-Even Point S = – 60 + 0.1 Y is the saving function, where S is Saving and Y is National Income and Investment Expenditure (I) is Rs. 4,000 crore in an economy. Calculate the Equilibrium level of Income.

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Question 11

On the basis of following schedule, answer the given questions : (a) Calculate Marginal Propensity to Save (MPS) at Rs. 150 crores level of income. (b) What is the value of Autonomous Consumption ? In an economy 75 percent of the increase in income is spent on consumption. Investment increased by Rs. 1,000 crore. Calculate the total increase in income on the basis of given information.

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