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CBSE 2015 Class 12 Economics Outside Delhi Set-3

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Question : 2 of 3
Marks: +1, -0
An economy is in equilibrium. Calculate the national Income from the following:
Autonomous Consumption =120=120
Marginal Propensity to Save =0.2=0.2
Investment Expenditure =150=150
Solution:  
Autonomous Consumption =120=120
   MPS     =0.20\; \text{ MPS }\;\;=0.20
   (b)   MPC  =1−MPS=1−0.20=0.86\; \text{ (b) }\; MPC\;=1- MPS=1-0.20=0.86
I  =150I\;=150
Y  =?Y\;=?
Y  =C+IY\;= C+ I
C  =a+byC\;= a+ by
  =120+0.8Y\;=120+0.8 Y
Y  =120+0.8Y+150Y\;=120+0.8 Y+150
1Y−0.8Y  =2701 Y-0.8 Y\;=270
0.2Y  =2700.2 Y\;=270
∴Y  =  2700.20=1350\therefore Y\;=\;\frac{270}{0.20}=1350
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