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Question : 3
Total: 7
Given the following information, state whether the economy is in equilibrium or not:
| S.No. | Particulars | Amount |
|---|---|---|
| (i) | Autonomous Consumption & Investment Expenditure | ₹ 700 crores |
| (ii) | Marginal Propensity to Consume (MPC) | 0.8 |
| (iii) | National Income | ₹ 4,000 crores |
Solution:
The economy is in equilibrium when A D = A S ( Y )
Autonomous consumption and Investment expenditure= ₹ 700
Marginal propensity to consume (MPC)= 0.8
National Income( Y ) = ₹ 4 , 000
= ( C ) + MPC ( b ) × Y
= 700 + 0.8 × 4 , 000
= 700 + 3 , 200 = 3 , 900
= ₹ 3 , 900 crores
(₹ 3 , 900 ₹ 4 , 000
The economy is not in equilibrium.
Autonomous consumption and Investment expenditure
Marginal propensity to consume (MPC)
National Income
(
The economy is not in equilibrium.
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