• # question_answer An economy is in equilibrium. Calculate the national Income from the following: Autonomous Consumption = 120 Marginal Propensity to Save = 0.2 Investment Expenditure = 150

 $a=120$ MPS = 0.20 (b) $MPC=1-MPS=10.20=0.86$ I = 150 Y =? $Y=C+I$ $C=a+by$ $=120+0.8Y$ $Y=120+0.8Y+150$ $1Y0.8Y=270$ $0.2Y=270$ $\therefore$               $Y=\frac{270}{0.20}=1350$