CBSE 2023 Class 12 Economics Delhi Set 1

Question : 8 of 49

Marks: +1, -0

If increase in National Income is equal to increase in Savings, the value of Marginal Propensity to Consume would be _______.
(Fill up the blank with correct alternative)

equal to unity
less than one
greater than one
equal to zero

Solution:

(d) equal to zero
Explanation:
Increase in National Income = Increase in Saving
Or

∆ {\Y}=∆ {\S}

We Know that

∆ Y=∆ C+∆ S

\;∆ Y-∆ S=∆ C

\;∆ Y-∆ Y=∆ C

(Because here,

∆ Y=∆ C

)

0=∆ C

Now,

{\MPC}=\;{∆ {\C}}/{∆ {\Y}}=\;{0}/{∆ {\Y}}=0

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