CBSE 2016 Class 12 Economics Delhi Set-2

Question : 1 of 3

Marks: +1, -0

SECTION-B

(Macro-economics)

Suppose marginal propensity of consume is

{0 . 8}

. How much increase in investment is required to increase national income by

₹ 2000

crore? Calculate.

Solution:

Marginal propensity to consume

( {\MPC})=0.8

Change in income

=₹ 2000

crore

{\k}\;=1 \/ 1- {\MPC}

\;=1 \/ 1-0.8=1 \/ 0.2=5

{\k}\;=∆ {\Y} ÷ ∆ {\I}

5\;=2000 ÷ ∆ {\I}

5 ∆ {\I}\;=2000

∆ {\I}\;=\;{2000}/{5}

∆ {\I}\;=400 \;\text " crores "\;

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