As a result of increase in investment by Rs. 125 crores, national income increases by Rs. 500 crores. Calculate marginal propensity to consume.
CBSE DELHI - SET 1 2008
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$\triangle{\text{Y}} =\triangle {\text{I}} \frac{1}{\text{1-mpc}}$$500 = 125 \frac{1}{\text{1-mpc}}$
$500-500{\text{MPC}} =125$
$- 500{\text{MPC}} = 125-500 = -375$
${\text{MPC}} = 0.75$
$500-500{\text{MPC}} =125$
$- 500{\text{MPC}} = 125-500 = -375$
${\text{MPC}} = 0.75$
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