Practicing Success
If the income rises from Rs 500 crore to Rs 1000 crore, as result the consumption expenditure rises from Rs 500 crore to Rs 600 crore. What will be the marginal propensity to consume in such a case? |
0.8 0.4 0.5 0.2 |
0.2 |
The correct answer is Option 4: 0.2 MPC = \(\frac{ΔC }{ ΔY}\) ΔC = 100 ΔY = 500 Thus, MPC = \(\frac{100 }{ 500}\) = 0.2 |