What will be the value of MPC considering the economy to be in equilibrium, when national income is Rs 5,000 crore , investment expenditure is Rs. 300 crore and autonomous consumption expenditure is Rs 100 crore?

None of the above

The correct answer is Option 4: None of the above

At equilibrium Y = C + I,

C (Consumption Function)= A + MPC * Y

where A= Autonomous Consumption = Rs 100 Crore

I= Investment =Rs 300 crore

Y= Income = 5000 Crore

Y = A + MPC * Y + I

5,000 = 100 + MPC* (5,000) + 300

5,000 = 400 + MPC* (5,000)

MPC *(5,000) = 4,600

MPC= \(\frac{4,600 }{ 5,000}\)

MPC = 0.92