CBSE Class-12 Economics: Questions 302 - 307 of 523

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Question number: 302

» Determination of Income and Employment » Propensity to Consume and Propensity to Save

Essay Question▾

Describe in Detail

An increase in investment leads to total rise in national income by Rs. 500 crores. If Marginal Propensity to Consume is 0.9, what is the increase in investment? Calculate.

Explanation

Y = Rs. 500 crores Marginal propensity to consume (MPC) =0.9 I=?

K=1/1MPC=Y/ΔI

I=Y×(1MPC)

=500×(1… (24 more words) …

Question number: 303

» Consumer's Equilibrium and Demand » Demand » Demand Curve

Essay Question▾

Describe in Detail

Explain the effect of rise in the prices of related goods on the demand of a good.

Explanation

Rise in price of related goods: - The related goods can be classified into following categories.

  • Substitute Goods: - Substitute goods refer to those goods that can be consumed in place of another good.
  • For Example tea and sugar. In case of substitute goods, if the price of one good… (212 more words) …

Question number: 304

» National Income and Related Aggregates » Personal Income

Essay Question▾

Describe in Detail

Calculate Gross National Disposable Income and Personal Income from the given data: (Rs crore)

calculate Gross National Disposable Income and Personal Income

Find Gross National Disposable Income and Personal Income

-

(Rs crore)

Personal tax

120

Net indirect tax

100

Corporation tax

90

National income

1000

Net factor income from abroad

5

Consumption of fixed capital

50

National debt interest

70

Retained earnings of private corporate sector

40

Net current transfers to the rest of the world

(-) 20

Current transfers from government

30

National income accruing to government

80

Explanation

Gross National Disposable Income = National income + Net indirect tax + Consumption of fixed capital - Net current transfers to the rest of the world

=1000 + 100 + 50 – (-20)

Rs. 1170crore

Personal income = National income - National income accruing to government + National debt interest… (42 more words) …

Question number: 305

» Government Budget and the Economy » Classification of Expenditure

Essay Question▾

Describe in Detail

Distinguish between ‘revenue expenditure’ and ‘capital expenditure’. Give two examples of

Explanation

Distinguish between revenue expenditure and capital expenditure

Distinguish between revenue expenditure and capital expenditure in detail

Characteristics

Revenue expenditure

Capital expenditure

Definition

An expenditure which neither creates assets nor reduces liability

Capital expenditure which either creates an asset or reduces liability

How we get this?

It is obtained for normal… (76 more words) …

Question number: 306

» Determination of Income and Employment » Propensity to Consume and Propensity to Save

Essay Question▾

Describe in Detail

Given marginal propensity to save equal to 0.25 what will be the increase in national income if investment increase by Rs. 125 crores calculate.

Explanation

K= 11MPS = 110.25 = 1.33

K= ΔyΔI ΔI=YK = 1251.33 =480

So, desired increase in investment = Rs. 93.98 crore.

Calculation of Marginal Propensity to Save

In this video calculation of marginal… (5 more words) …

Question number: 307

» Producer Behaviour and Supply » Production Function

Essay Question▾

Describe in Detail

Explain why production possibility frontier is concave.

Explanation

Production Possibility Frontier (PPF) is concave to its origin because Marginal opportunity cost ΔlossofYΔgainofX in this commodity-Y to commodity-x shifted resources because resources are specific and more resources are allocated to x in place of… (43 more words) …

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