In an economy, C = ₹ 300 + 0.5Y and I = 3600 (where, C = Consumption, Y = Income, 1 = Investment). Calculate the following:
- Equilibrium level of income.
- Consumption expenditure at equilibrium income.
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- Here, I = ₹ 600 and C = 300 + 0.5Y
⇒ Y = 300 + 0.5Y + 600
Y - 0.5Y = 900
0.5Y = 900
So, $\text{Y}=\frac{900}{0.5}=1,800$
- Again, Y = C + I
So, C = 1,800 - 600 = ₹ 1,200
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