CBSE 2015 Class 12 Economics Outside Delhi Set-1

Question : 13 of 18

Marks: +1, -0

An economy is in equilibrium. Calculate the Investment Expenditure from the following:
National Income

={8 0 0}

Marginal Propensity to Save

=0.3

Autonomous Consumption

=100

Solution:

Given

{\Y}\;=800

{\MPS}( {\ s})\;=0.3

i.e,

{\MPC}( {\c})\;=1-\;\text " MPS "\;=1-0.3=0.7

{\C}\;=100

We know that at equilibrium,

Y\;=C+1

C\;=a b+b y

\;=100+0.7 y

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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