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Aggregate Demand, Consumption & Saving · Question 23 of 60

Question 23

EasyOriginal question

Income rises from ₹1,000 crore to ₹1,200 crore and consumption rises from ₹800 crore to ₹950 crore. The MPC is

Options for question 23

Show the answer and explanation
CorrectNot quiteAnswer A

Correct answer: A

Explanation

  1. ΔC = 950 − 800 = 150; ΔY = 1,200 − 1,000 = 200.

  2. MPC = 150 ÷ 200 = 0.75.

Worth noting

0.8 is the APC at the start (800 ÷ 1,000), not the MPC.

Concept
Calculating MPC
Typical time
40 s
Your time
—
The rule this testsAPC, MPC, APS and MPS
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