--%>
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 : Formation of a cartel This would be

    This would be easiest to form a cartel between: (w) retail grocers. (x) aluminum producers. (y) dairy farmers. (z) domestic marijuana producers. Can anybody suggest me the proper explanation for given problem regar

    		•
  • Q : Demand is the price in the "law of

    is the price in the "law of demand" a relative price or an absolute price

    		•
  • Q : Income elasticity and inferior goods

    Raises in real income that causes the demands for: (i) inferior goods to shift upward and to the left. (ii) normal goods to shift upward and to the right. (iii) substitute goods to shift upward and to the right. (iv) complementary goods to decline mor

    		•
  • Q : Quantity demanded decrement of elastic

    When the price elasticity of demand for goose grease is 2.5 and a 10% price hike will reasons of quantity demanded to: (w) grow by roughly 2.5%. (x) grow by roughly 25%. (y) fall by roughly 25%. (z) fall by roughly 4%.

    Q : Profit Maximization-total proceeds and

    The entire profit maximizing organization will hire more labor up to the point where: (w) Average physical product of labor equivalents the nominal wage. (x) Last unit of labor adds uniformly to net revenue and net cost. (y) Marginal product of the labor is at its hig

    		•
  • Q : Problem on least monopsony power The

    The Firms which have at least some monopsony power will never: (i) Practice wage discrimination. (ii) Find out wage rates in portion by the number of workers it hires. (iii) Pay higher wages than would a firm hiring from the competitive labor market. (iv) Raise the em

    		•
  • Q : Problem on greatest consumer surplus

    Which of the following below goods produces the greatest consumer surplus? (1) Free downloading to pirate your favorite songs. (2) Diamonds. (3) Water. (4) College textbooks. (5) Slices of the pizza. Choose the right answer from th

    		•
  • Q : Can the value of APS be negative Can

    Can the value of APS be negative:Yes, the value of APS is negative; when there are dissavings.

    		•
  • Q : Labor Unions and Antitrust The legality

    The legality of trade unions as the labor monopolies and illegality of the monopolies in product markets is most rationally described by the: (i) Trade union’s interest in the social welfare and firm’s interest only in gains. (ii) Number of people who adva

    		•
  • Q : Problem based on type of economy Tell

    Tell me the answer of this question. Economists would describe the U.S. automobile industry as: A) purely competitive. B) an oligopoly. C) monopolistically competitive. D) a pure monopoly.

    		•