12th Class Economics Solved Paper - Economics 2013 Delhi Set-III

  • question_answer
    C = 50 + 0.5Y is the consumption function where C is consumption expenditure and Y is National Income and investment expenditure is 2,000 in an economy.
    Calculate Equilibrium level of (National Income) Consumption expenditure of equilibrium level of national income.

    Answer:

    Y = National Income, Consumption Function, \[C=50+0.5\]Investment, I= 2,000
    (i) \[V=CIor\text{ }Y=\text{ }50+0.5Y+2,000\]
    or         \[0.5V=50+2,000=2,050\]
    or         \[Y=2,050\times \frac{10}{5}~=4,100\]
    \[\therefore \]      Equilibrium level of National Income = 4,100
    (ii)        Given, \[C=50+0.5V\]
                \[C=50+0.5(4,100)\]
                  \[0=50+2,050=2,100\]
    \[\therefore \]      Consumption expenditure at equilibrium level = 2,100


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