Consider a simple Keynesian closed economy model with the following information:
The Marginal Propensity to Consume (MPC) is 0.9 and the initial level of saving is INR 120. When income rises by INR 100, then the new level of saving will be INR ______ (in integer)
Checking your account…
Consumption and investment has come up 74 times in 7 exams since 2005.
This question is on The Keynesian consumption function, part of Consumption and investment in Macroeconomics.
Consumption as a function of current income: the propensities to consume and save.
TestStop has 17 past-paper questions on this subtopic; the nearest in year are below.
Question from the GATE 2025 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.