Value of MPC
Why can be value of MPC be not more than one? Answer: The value of MPC will not be more than one since increment in consumption (ΔC) can’t be more than the equivalent increment in income (ΔY), that is, ΔC < ΔY.
Why can be value of MPC be not more than one?
Answer: The value of MPC will not be more than one since increment in consumption (ΔC) can’t be more than the equivalent increment in income (ΔY), that is, ΔC < ΔY.
Explain the main features of Harrod - Domar Growth model. How does the Harrod Domar model explain the occurrence of trade cycles?
With the general equilibrium framework in place, the stage is now set for introducing fiscal and monetary changes and analysing their effects on the general equilibrium. We will first introduce a fiscal change in the form of increase in deficit-financed expenditure, a
The usual household maximizes the utility by spending all its money to purchase and consume a combination of goods which yields: (1) Fundamental physiological requirements and customary wants. (2) Maximum status and the social prestige. (3) Complete satisfaction of al
Why the repayment of loan is a capital expenditure? Answer: Repayment of loan is taken as a capital expenditure since it diminishes the liabilities of Government.
The Income effects will be most strongly positive for: (1) Normal goods. (2) Necessities. (3) Superior or luxury goods. (4) Substitutes and much negative for the complements. Find out the right answer from the above options.
What is the base of categorizing receipts into revenue and capital receipts?
What do you understand by the term Price (P) at Market in Economy?
Individuals maximize the satisfaction whenever the marginal utilities of all goods are: (i) Precisely proportional to the consumer’s income. (ii) Maximized. (iii) Precisely proportional to the opportunity costs of consuming them. (iv) Equivalent
What relationship does the MPC bear to the size of the multiplier? The MPS? What will the multiplier be when the MPS is 0, .4, .6, and 1
How will you treat the given in estimating rational income of India? Provide reasons for your answer. (i) The value of bonus shares received by the shareholders of a company.(ii) Interest received on loan pro
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