In an economy, every time the income rises, `75` percent of the rise in income is spent on consumption. Now suppose in the same economy investment ris

Monjur Alahi

In an economy, every time the income rises, `75` percent of the rise in income is spent on consumption. Now suppose in the same economy investment rises by Rs. `750` crore.
Calculate : (i) change in income, (ii) change in saving.


0 like 0 dislike
1 views
Share with your friends

1 Answers

Salim Ahmed Kawsar

Call

(i) `MPC=0.75, :. MPS=0.25`
`:. K=1/(1-MPC)=1/(1-0.75)=4`
`:. DeltaY=K. Delta I=4xx750` crore = Rs. `3,000` crore
`133`
(ii) `DeltaS=DeltaY-DeltaC=3,000-(0.75xx3,000)`
`=3000-2250` crore = Rs. `750` crore.

0 like 0 dislike
1 views
Talk Doctor Online in Bissoy App
An economy is in equilibrium. From the following data about an economy investment expenditure. (i) Income=1000 (ii) Marginal propensity to consumption

Y=C+I `Y=bar(C)+bY+I` `Y=bar(C)+bY+I` `10000=100+9000+I` I=10000-9100 I=900

2 Answers 1 views
An economy is in equilibrium. From the following data, calculate MPS. (i) Income=10,000 (ii) Autonomous consumption =500 (iii) Consumption expenditure

`C=barC+bY` 8000=500+b(10,000) b(10,000)=7500 `b=(7500)/(10,000)=0.75` or MPC=0.75 We know that MPC + MPS =1 0.75+MPS=1 MPS=1-0.75

2 Answers 1 views
In an economy, every time income rises, 75% of the rise in income is spent on consumption. Now suppose in the same economy investment rises by Calcula

3000 crore, 750 crore

2 Answers 1 views
In an economy with every increase in income 15% of the increased income is saved. Suppose a fresh investment of 600 crore takes place in the economy,

4000 crore, 3400 crore

2 Answers 2 views
In an economy C=200 +0.75Y is the consumption function where C is consumption expenditure national income. Investment expenditure is 4000. Calculate e

Correct Answer - `16800,12800`

2 Answers 1 views
C= 100 + 0.4Y is the consumption function of an economy where C is consumption expenditure and Y is National Income. Investment expenditure is 1100. C

Correct Answer - 2000900

2 Answers 2 views
A 5 percent fall in the price of X leads to a 10 percent rise in demand for X. A2 per cent reise in the price of Y leads to a 6 percent fall in demand

`E_(P) " of "X=(10)/(-5)=(-)2` `E_(P) " of "Y=(-6)/(2)=(-)3`

2 Answers 1 views
The price of a commodity is Rs.12 per unit and its quantity supplied is 500 units. When its price rises to Rs. 15 per unit , its quantity supplied ris

`E_(s)=(P)/(Q_(s))xx(DeltaQ_(s))/(DeltaP)=(12)/(500)xx(150)/(3)=1.2` Yes, the supply is elastic because `E_(s) gt 1`

2 Answers 2 views
In an economy investment increased by 1,100 and as a result of it income increased by 5,500. Had the MPS been 25 percent, what would have been the inc

`DeltaY = DeltaI = (1)/(MPS)` `5,500 = (1,100)/(MPS)` `MPS = (1,100)/(5,500) = 0.20` `Delta Y = (1,100)/(0.25) = 4,400`

2 Answers 3 views
C=100+0.4 Y is the consumption Function of an economy where C is consumption expenditure and Y is National income , Inestment expenditure is 1,100 cal

Correct Answer - {(Rs. 2000;(ii) Rs.900)} {(Rs.2000;(ii) Rs.900)} {(Rs.4100;(ii) Rs.2100)}

2 Answers 1 views
X