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If the income increases from 2500 to 3900 and autonomous investment increase by 350 , the mpc should be?
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If the income increases from 2500 to 3900 and autonomous investment in...
Introduction:
The marginal propensity to consume (MPC) is a measure of how much an increase in income will be spent on consumption. It represents the proportion of additional income that is used for consumption rather than saving. In this case, we are given that income has increased from 2500 to 3900, and autonomous investment has increased by 350. We need to determine the MPC in this scenario.

Calculating the MPC:
To calculate the MPC, we need to consider the change in consumption and the change in income. The formula to calculate the MPC is:
MPC = Change in Consumption / Change in Income

Change in Consumption:
To calculate the change in consumption, we need to subtract the initial consumption from the final consumption. Since we are not given any specific information regarding consumption, we can assume that it remains constant. Therefore, the change in consumption would be zero.

Change in Income:
The change in income can be calculated by subtracting the initial income from the final income. In this case, the initial income is 2500 and the final income is 3900. Therefore, the change in income would be 3900 - 2500 = 1400.

Calculating the MPC:
Now that we have the change in consumption (0) and the change in income (1400), we can calculate the MPC using the formula:
MPC = Change in Consumption / Change in Income
MPC = 0 / 1400 = 0

Explanation:
The MPC in this scenario is 0. This means that there is no change in consumption even though the income has increased. It implies that all of the additional income is being saved or used for purposes other than consumption. A 0 MPC indicates a high propensity to save rather than spend.
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If the income increases from 2500 to 3900 and autonomous investment increase by 350 , the mpc should be?
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If the income increases from 2500 to 3900 and autonomous investment increase by 350 , the mpc should be? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about If the income increases from 2500 to 3900 and autonomous investment increase by 350 , the mpc should be? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If the income increases from 2500 to 3900 and autonomous investment increase by 350 , the mpc should be?.
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