An economy is in equilibrium. From the following data calculate investment expenditure:
- Marginal propensity to consume = 0·9
- Autonomous consumption = 200
- Level of income = 10000
CBSE FOREIGN - SET 2 2017
Download our app for free and get started
$\text{Y}=\text{C}+\text{I}$$=\overline{\text{C}}+{\text{mpc}}\left({\text{Y}}\right)+\text{I}$
$10000=200+\frac{9}{10}\left(10000\right)+\text{I}$
$\text{I}=10000-200-9000=800$
$10000=200+\frac{9}{10}\left(10000\right)+\text{I}$
$\text{I}=10000-200-9000=800$
Download our appand get started for free
Experience the future of education. Simply download our apps or reach out to us for more information. Let's shape the future of learning together!No signup needed.*
Similar Questions
- 1View SolutionDifferentiate between APC and APS and tell which of them is negative.
- 2View SolutionState and discuss the components of Aggregate Demand in a two sector economy.
- 3View SolutionWhat is ex-Ante consumption? Distinguish between autonomous consumption and induced consumption.
- 4View SolutionCalculate Marginal Propensity to Consume from the following data about an economy which is in equilibrium:
National income = 2,000 Autonomous consumption expenditure = 200 Investment expenditure = 100 - 5View SolutionThe savings function of an economy is S = -200 + 0.25Y. The economy is in equilibrium when income is equal to ₹ 2,000.
Calculate:- Investment expenditure at equilibrium level of income.
- Autonomous consumption.
- 6View SolutionCalculate investment expenditure from the following data about an economy which is in equilibrium:National income = 1000
Marginal propensity to save = 0.20
Autonomous consumption expenditure = 100 - 7View SolutionIn an economy, an increase in investment leads to increase in national income which is three times more than the increase in investment. Calculate marginal propensity to consume.
- 8View SolutionDefine full employment in an economy. Discuss the situation when aggregate demand is more than aggregate supply at full employment income level.
- 9View SolutionIf Marginal Propensity to Consume is 0.9, what is the value of multiplier? How much investment is needed to increase National Income by ₹ 5,000 crore? Calculate.
- 10View SolutionExplain the relationship between marginal propensity to consume and investment multiplier.