--%>
Assignment Help - homework help

Consumption expenditure

In an economy 75% of increase in income is spent on the consumption. Investment raised by Rs. 1000 Crore. Compute:

(A) Total increase in income
(B) Total increase in consumption expenditure

E

Expert

Verified

MPC = 75% = 75/100 =3/4
MPS = 1-3/4 = 1/4 K=4

(A) DY = DI x K
= 1000 x 4
= 4000 Crore

(B) DY = DC + DI
DC = DY - DI
= 4000-1000
= Rs. 3000 Crore

   Related Questions in Microeconomics

  • Q : Estimate total revenue when unitarily

    When the demand for computer hard drives is unitarily price elastic among lower prices and current prices, lowering prices slightly will yield as: (w) higher total revenue. (x) lower total revenue. (y) no change in total revenue. (z)

    		•
  • Q : Ceiling price problem When the

    When the government obliged a ceiling price of P0 on papayas, the market scarcity would correspond to line: (1) ab. (2) cd. (3) ac. (4) bd. (5) ae. </span></p> </div> <!-- /comment-box --> </li> </td> </tr><tr> <td> <li> <div class=

    Q : Problem regarding Craft Unions Can

    Can someone help me in finding out the right answer from the given options. The craft unions historically tried to systematize all the workers in: (1) A specific company, in spite of size. (2) The United States. (3) The specific broad industry. (4) Relatively highly s

    		•
  • Q : Define tax Tax : It is a compulsory

    Tax: It is a compulsory payment prepared by household and firm to government.

    		•
  • Q : What is Barter system Barter system :

    Barter system: It is the Exchange of goods for goods is termed as barter system.

    		•
  • Q : Elastic industry What industry is

    What industry is perfectly elastic that is not agriculture?

    		•
  • Q : Goal of profit sharing plans Give the

    Give the answer of following question. For the firm, the major goal of profit sharing plans is to: A) force workers to incur some of the business risk. B) overcome the monopsony problem of having to pay higher wages to attract additional workers. C) overcome the princ

    		•
  • Q : Inelastic demand over relevant price

    While rate hikes will boost a utility's total revenue, in that case the utility faces: (w) elastic demand over the relevant price range. (x) unitarily elastic demand over the relevant price range. (y) inelastic demand over the relevant price range. (z

    		•
  • Q : Problem related to budget line Refer to

    Refer to the budget line illustrated in the diagram given. If the consumer's money income is $20, the: 1) prices of C and D cannot be determined.2) price of C is $2 and the price of D is $4. 3) consumer can obtain a combination of 5 units of both C and D. 4)

    		•
  • Q : Problem on perfectly competitive

    Can someone please help me in finding out the accurate answer from the following question. The profit-maximizing firm which is perfectly competitive in the resource market however which has the market power in output market will hire labor at a point where: (1) VMP =

    		•