Test Index

CBSE 2014 Class 12 Economics Delhi Set-1

© examsnet.com
Question : 14 of 19
Marks: +1, -0
Calculate investment expenditure from the following data about an economy which is in equilibrium :
National income =1000=1000
Marginal propensity to save =0.25=0.25
Autonomous consumption expenditure =200=200.
Solution:  
We know,
  Y=C+I\;Y=C+I
  C=c‾+cY\;C=\overline{c}+cY
∴  Y=c‾+cY+1\therefore \;Y=\overline{c}+cY+1
Where c‾=\overline{c}= autonomus consumption (200)
c=c= marginal propensity to consume
(1−MPS=1−0.25=0.75)(1-\text{MPS}=1-0.25=0.75)
Y=Y= national income =₹ 1000=\text{₹}\,1000
I = Investment expenditure by putting the value
1000  =200+0.75×1000+I1000\;=200+0.75\times1000+I
I  =1000−(200+750)I\;=1000-(200+750)
  =1000−950\;=1000-950
I  =₹ 50I\;=\text{₹}\,50
© examsnet.com
Go to Question:
Prev Question
Next Question