question_answer

Find national income from the following:

Autonomous consumption                  =Rs 100

Marginal propensity to consume          =0.80

Investment                                           =Rs. 50

Answer:

C = Rs. 100

MFC (b) = 0.80

I = Rs. 50

At Equilibrium,

\[Y=C+I\]

or,        \[Y=\overline{C}+bY+I\]

substituting the values,

\[Y=100+0.8V+50\]

or,        0.2 Y = 150

or,        Y = Rs. 750

\[\therefore \]      National Income = Rs. 750