Macro

Income & Employment

Easy

Marginal propensity to save in zero when.

Income is zero.

Autonomous consumption is 1.

The entire income is saved.

The entire additional income is consumed.

✅ Correct Option: 4

MPS = change in saving / change in income. MPC + MPS = 1. If the entire additional income is consumed, MPC = 1, which means MPS = 0.

2025: 31 May Shift 1

Arrange the following statements in chronological order in respect to the increase in the proportion of income people save.

(A) Marginal propensity to consume decreases.

(B) The level of income decreases.

(D) The aggregate demand curve shifts downwards.

Choose the correct answer from the options given below:

2025: 31 May Shift 1

From the following figure, how to obtain an aggregate demand function?

2025: 13 May Shift 2

The ratio of the total increment in equilibrium value of final goods output to the initial increment in autonomous expenditure is called:

2026: 20 May Shift 1

In an economy, C= 100 + 0.7Y and investment is 500 crores. Find the equilibrium level of income.

2022: 10 Aug Shift 2

If MPC = 0.75, autonomous consumption = 100 crore, then find the level of consumption at income level = 8,000 crore :

2025: 21 May Shift 1

Match List-I with List-II

List-I	List-II
(A) Effective demand	(I) National Income
(B) Say's law of markets	(II) Aggregate demand exceeds aggregate supply at full employment
(C) Inflationary gap	(III) Supply creates its own demand
(D) Aggregate supply	(IV) Aggregate demand at equilibrium level

Choose the correct answer from the options given below:

Solution