# Determination of Income and Employment (CBSE (Central Board of Secondary Education- Board Exam) Class-12 Economics): Questions 16 - 22 of 35

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## Question number: 16

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

Appeared in Year: 2009

Essay Question▾

### Describe in Detail

 Income Saving Marginal Propensity to Consume Average Propensity to Save 0 -12 - - 20 -6 - - 40 0 - - 60 6 - -

### Explanation

 Income (Y) Saving (S) Consumption (C) Marginal Propensity to Consume Average Propensity to Save 0 -12 12 - - 20 -6 26 0.7 -0.3 =

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## Question number: 17

» Determination of Income and Employment » Excess & Deficient Demand

Appeared in Year: 2010

### Write in Short

How is primary deficit calculated?

## Question number: 18

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

Essay Question▾

### Describe in Detail

Complete the following table:

 Income Saving Marginal propensity to consume Average propensity to consume 0 -20 - - 50 -10 - - 100 0 - - 150 30 - - 200 60 - -

### Explanation

 Income Saving Consumption Marginal propensity to consume Average propensity to consume 0 -20 20 - - 50 -10 60 40/50 = 0.8 60/50 = 1.2

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## Question number: 19

» Determination of Income and Employment » Meaning & Types of Employment & Unemployment

Essay Question▾

### Describe in Detail

Explain the term ‘compensation of employees’.

### Explanation

“Compensation of employees” is a measure of the compensation paid by company owner. It excludes compensation paid to the rest of the world, and it includes compensation received from the rest of the world.

“Compensation of employees, received” is similar to “compensation of employees” in that it measures the compensation of company’s employees

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## Question number: 20

» 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

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

So, 500 crores is the increase in investment.

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## Question number: 21

» 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= = = 1.33

K= = =480

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

Calculation of Marginal Propensity to Save

In this video calculation of marginal propensity to save is explained.

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## Question number: 22

» Determination of Income and Employment » Meaning & Types of Employment & Unemployment