CBSE 2019 Class 12 Economics Outside Delhi Set 2

Question : 1 of 5

Marks: +1, -0

SECTION - B

(MACRO-ECONOMICS)

Estimate the change in initital investment if Marginal Propensity to Save (MPS) is 0.10 and change in final income is

\₹ 15,000

crores.

Solution:

\;\text " MPS "\;\;=0.10

\;\text " Change in Income "\;\;=₹ 15,000 \;\text " crores "\;

\;\text " Multiplier "\;( {\K})\;=\;{1}/{ {\MPS}}

\;=\;{1}/{0.10}

\;=10

{\K}\;=\;{\;\text " Change in income "\; ∆ {\Y}}/{\;\text " Change in investment "\; ∆ I .}

10\;=\;{15,000}/{\;\text " Change in investment "\;}

Change in investment

=₹ 1500

crores.

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