CBSE 2015 Class 12 Economics Outside Delhi Set-1

Question : 13

Total: 18

An economy is in equilibrium. Calculate the Investment Expenditure from the following:
National Income =800
Marginal Propensity to Save =0.3
Autonomous Consumption =100

Solution:

Given
Y‌=800
MPS( s)‌=0.3
i.e, MPC(c)‌=1−‌ MPS ‌=1−0.3=0.7
C‌=100
We know that at equilibrium,
Y‌=C+1
C‌=ab+by
‌=100+0.7y
By putting the value of Y and C
800=100+0.7(800)+I
800‌=100+560+I
I‌=800−660
I‌=₹140
Thus, the Investment expenditure is ₹140 .

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