Determination of Income and Employment-Propensity to Consume and Propensity to Save (CBSE Class-12 Economics): Questions 1 - 6 of 22

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Question number: 1

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

Essay Question▾

Describe in Detail

Draw a straight line consumption curve. From it derive a savings curve explaining the process. Show on this diagram:

(a) the level of income at which Average Propensity to Consume is equal to one.

(b) a level of income at which Average Propensity to Save is negative

Explanation

straight line consumption curve

Straight Line Consumption Curve

shows savings and dissavings

ob level of income con sumption

Ob Level of Income Con Sumption

it shows when savings are zero

saving curve from consumption curve

Saving Curve From Consumption Curve

shows level of income when APC = 1 and APC=-1

AC is the consumption curve and OA is the consumption expenditure at zero

level of… (97 more words) …

Question number: 2

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

One Liner Question▾

Write in Brief

What is the relationship between marginal propensity to consume and marginal propensity to save?

Question number: 3

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

One Liner Question▾

Write in Brief

What is the relationship between marginal propensity to save and marginal propensity to consume?

Question number: 4

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

Short Answer Question▾

Write in Short

Complete the following table:

Data of Income, Saving for calulation of MPC and APC

shows income level and savings at that point to find out MPC and APC

Income

Saving

MPC

APC

0

-20

-

-

50

-10

-

-

100

0

-

-

150

30

-

-

200

60

-

-

Question number: 5

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

Appeared in Year: 2005

Essay Question▾

Describe in Detail

Find Marginal Propensity to consume and Marginal Propensity to save

Find Marginal Propensity to consume and Marginal Propensity to save with explanantion

Level of income ( Rs. )

Consumption expenditure

Marginal Propensity to consume

Marginal Propensity to save

400

240

-

-

500

320

-

-

600

395

-

-

700

465

-

-

Explanation

Calculation Marginal Propensity to consume and Marginal Propensity to save

Calculation of Marginal Propensity to consume and Marginal Propensity to save with explanantion

Level of income ( Rs. ) (Y)

Consumption expenditure (C)

Marginal Propensity to consume

Marginal Propensity to save

400

240

0.60

0.40

500

320

0.80

0.20

600… (47 more words) …

Question number: 6

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

Appeared in Year: 2011

Essay Question▾

Describe in Detail

Explain the relationship between investment multiplier and marginal propensity to consume.

Explanation

Investment multiplier involve that any change in investment can cause change in income and output.

Investment multiplier K = ΔyΔI

Investment Multiplier shares direct positive relationship with marginal propensity to consume.

The relationship is expressed as follows.

K= 11MPC

Assume that value… (43 more words) …

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