NextQ92

From the following data calculate Investment Multiplier and Equilibrium level Income in the economy. (i) Change in initial investment (deltaI) = Rs. 1,000 crore (ii) Marginal Propensity to Save (MPS) = 0.5 (iii) Autonomous consumption (c_bar) = Rs. 50 crore (iv) Planned investment = Rs. 100 crore

Concept of Investment MultiplierStudy Simplify SpecialPYQ1MCQ
Question 91

Identify, what does the shaded area (deltaEFG), in the given figure indicate ? (45-degree line diagram with Income on the X-axis and Consumption on the Y-axis, the consumption function C = c_bar + bY cutting the 45-degree line at point E, with the shaded area EFG lying between the 45-degree line and the consumption line beyond E) I. Consumption > Income II. Saving = Zero (0) III. Consumption < Income IV. Saving < Zero (0) Alternatives : Marginal Propensity to Save (MPS) is the slope of ______ function. (Choose the correct alternative.) (A) Consumption (B) Cost (C) Saving (D) Investment

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