CBSE 2016 Class 12 Economics Outside Delhi Set-3

Question : 2

Total: 4

An economy is in equilibrium. Find investment expenditure:
National Income =1000
Autonomous Consumption =100
Marginal Propensity to consume (c)=0.8

Solution:

National Income (Y)=1000
Autonomous Consumption (C)=100
Marginal propensity to consume (c)=0.8
At Equilibrium, Y=C+I
Y‌=C+cY+I
1000‌=100+(0.8×1000)+I
1000‌=100+(800)+I
1000‌=900+I
1000−900‌=I
I‌=₹100.
Investment expenditure=₹100

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