NextQ145

(I) Estimate the value of subsistence level of consumption expenditure from the following data, about an economy which is in equilibrium : (i) National Income (Y) = Rs. 1,500 crore (ii) Marginal Propensity to Consume (MPC) = 0.8 (iii) Investment Expenditure (I) = Rs. 150 crore (II) "An economy facing unplanned accumulation of inventories would try to increase its Aggregate Demand." Defend or refute the given statement with valid arguments. (I) Complete the following table : (II) Identify the monetary measure being referred to each of the following and discuss whether the tool would be used during a situation of excess demand or deficient demand. (i) Buying government securities (G-Sec) from public. (ii) Discourage commercial banks to park their surplus funds with the Reserve Bank of India (RBI).

Concept of Investment MultiplierStudy Simplify SpecialPYQ1MCQ
Question 144

Choose the correct consumption function from the options given below with reference to the illustrated given diagram. (Graph with Income on the X-axis and Consumption on the Y-axis, showing a 45 degree Income Line and a consumption curve C intersecting at point E; C = 280 at income 200 and C = 700 at income 800.)

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