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Aggregate Demand, Consumption & Saving · Question 31 of 60

Question 31

MediumOriginal question

The MPS is 0.3 and income rises by ₹500 crore. Consumption rises by

Options for question 31

Show the answer and explanation
CorrectNot quiteAnswer B

Correct answer: B

Explanation

  1. MPC = 1 − 0.3 = 0.7.

  2. ΔC = 0.7 × 500 = ₹350 crore.

Worth noting

₹150 crore is the rise in saving.

Concept
Change in consumption
Typical time
70 s
Your time
—
The rule this testsAPC, MPC, APS and MPS
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