Define marginal propensity to consume.
Marginal Propensity to Consume is the proportion of additional income that an individual consumes. MPC refers to the ratio of change in the consumption expenditure and change in the disposable income.
Recently Government of India has doubled the import duty on gold. What impact is it likely to have on foreign exchange rate and how?
Is the following, revenue expenditure or capital expenditure in the context of government budget? Give reason.
(i) Expenditure on collection of taxes.
(ii) Expenditure on purchasing computers.
Define externalities. Give an example of negative externality. What is its impact on welfare?
