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12th Class Economics Solved Paper - Economics 2015 Outside Delhi Set-II

  • question_answer
    An economy is in equilibrium. Calculate the Marginal Propensity to Save from the following:
    National income = 1,000
    Autonomous consumption = 100
    Investment = 120
     

    Answer:

    Given:
    National Income (Y) = 1000
    Autonomous Consumption (a) = 100
    Investment (I) =120
                           \[Y=C+I\]
                           \[C=a+bY\]
                           \[Y=100+b\times 1000+120\]
             \[1000120=100+b\]
                        \[880=100+1000\text{ }b\]
               \[880100=1000\text{ }b\]
                        \[780=1000\text{ }b\]
                            \[b=\frac{780}{1000}=0.78\]
                     \[MPC=0.78\]
                      \[MPS=1-MPC\]
                              \[=1-0.78\]
                              = 0.22


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