Find Consumption Expenditure from the following: |
National Income = Rs. 5,000 |
Autonomous Consumption = Rs. 1,000 |
Marginal propensity to consume = 0.80 |
Answer:
National Income, Y= Rs. 5,000 Autonomous consumption (a) = Rs. 1,000 Marginal propensity to consume (b) = 0.80 \[\therefore \]Consumption, (C) \[=a+bY=1,000+0.8(5,000)=1,000+4,000=\mathbf{Rs}.\text{ }\mathbf{5},\mathbf{000}\]
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