Calculate investment expenditure from the following data about an economy which is in equilibrium:
| National Income | = | ₹ 1,000 |
| Marginal Propensity to Save | = | 0.20 |
| Autonomous consumption expenditure | = | ₹ 100 |
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Given, $\text{Y}=₹ \ 1,000$$\text{MPS}=0.20,\bar{\text{C}}=₹ \ 100,\text{I}=?$
$\text{b or MPC}=1-\text{MPS}$
$=1-0.20=0.80$
$\text{Y = C + I}$
$\text{Y}=\bar{\text{C}}+\text{bY + I}$
$1,000=100+0.80\times1,000+\text{I}$
$\text{I}=1,000-900,\text{I}=100$
$\text{b or MPC}=1-\text{MPS}$
$=1-0.20=0.80$
$\text{Y = C + I}$
$\text{Y}=\bar{\text{C}}+\text{bY + I}$
$1,000=100+0.80\times1,000+\text{I}$
$\text{I}=1,000-900,\text{I}=100$
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