Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Determination of Income and Employment

Question:

Income of Raj increased by ₹200, MPC being 0.8, what will be increase in consumption?

Options:

40 rupees

160 rupees

180 rupees

200 rupees

Correct Answer:

160 rupees

Explanation:

MPC = \(\frac {∆C}{∆Y}\)
0.8 =  \(\frac {∆C}{200}\)
∆C = 160