CBSE 2015 Class 12 Economics Outside Delhi Set-3

Question : 2 of 3

Marks: +1, -0

An economy is in equilibrium. Calculate the national Income from the following:
Autonomous Consumption

=120

Marginal Propensity to Save

={0 . 2}

Investment Expenditure

={1 5 0}

Solution:

Autonomous Consumption

=120

\;\text " MPS "\;\;=0.20

\;\text " (b) "\; {\MPC}\;=1- {\MPS}=1-0.20=0.86

{\I}\;=150

{\Y}\;=?

{\Y}\;= {\C}+ {\I}

{\C}\;= {\a}+ {\by}

\;=120+0.8 {\Y}

{\Y}\;=120+0.8 {\Y}+150

1 {\Y}-0.8 {\Y}\;=270

0.2 Y\;=270

∴ Y\;=\;{270}/{0.20}=1350

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