CBSE 2022 Class 12 Economics Delhi Set 1 (Term 2)

Question : 4 of 21

Marks: +1, -0

An Economy is in equilibrium, calculate the Marginal Propensity to Save (MPS) from the following:
(i) National Income (Y)

=\₹ 4,400

(ii) Autonomous Consumption

(\ov{ {\C}})=\₹ 1,000

(iii) Investment Expenditure (I)

\;\; =\₹ 70

Solution:

\;\text " MPS "\;=\;\text " ? "\;

National Income

(Y)=₹ 4400

Autonomous Consumption

(\ov{ {\C}})=₹ 1000

Investment Expenditure

( {\I})=₹ 70

{\Y}\;= {\C}+ {\I}

₹ 4400\;= {\C}+₹ 70

{\C}\;=₹ 4330

{\C}\;=\ov{ {\C}}+b {\Y}

4330\;=1000+b(4400)

(4330-1000)\;=4400 b

\;{3330}/{4400}\;=b

( {\MPC}) b\;=0.76

{\MPS}\;=1- {\MPC}

\;=1-0.76

\;=0.24

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