Macro

Income & Employment

Easy

When income rises by Rs.10, then induced consumption will rises by?

Average propensity to consume (APC).

Marginal propensity to consume (MPC).

MPC times rise in income.

Marginal propensity to save (MPS).

✅ Correct Option: 2

NCERT defines MPC as the change in consumption for a unit change in income. It also states that when income rises by Re. 1, induced consumption rises by MPC.

For a rise of Rs. 10, the exact increase in induced consumption would be MPC × 10. So Option 3 is mathematically more precise. However, NTA's official answer key marks Option 2, Marginal Propensity to Consume (MPC), and we are strictly following that key.

2025: 27 May Shift 2

The value that marginal rate of propensity can take in consumption function.

2022: 10 Aug Shift 2

Given the following set of data calculate equilibrium income.

C = 100 + 0.8 y.

Investment = Rs. 260 Cr.

2025: 21 May Shift 1

Match List-I with List-II

List-I	List-II
(A) Marginal propensity to save	(I) Slope of consumption function
(B) Marginal propensity to consume	(II) Value is 1 at the break even point of the economy
(C) Investment Multiplier	(III) Reciprocal of marginal propensity to save
(D) Average propensity to consume	(IV) 1- c

Choose the correct answer from the options given below:

2025: 3 June Shift 2

The function of the investment multiplier is?

2026: 6 June Shift 1

Which of the following depicts the actual meaning of marginal propensity to save (MPS)?

2026: 19 May Shift 2

Which one of the following statements is correct regarding equilibrium level of income in an economy?

When income rises by Rs.10, then induced consumption will rises by?

Solution

Related questions:

Keyboard Shortcuts

CUET Economics Past Year Questions (Topic-Wise)