CBSE 2016 Class 12 Economics Outside Delhi Set-3

Question : 2 of 4

Marks: +1, -0

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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