An economy is in equilibrium. From the following data about an economy calculate investment expenditure: |
(i) Income = 10000 |
(ii) Marginal propensity to consume =0.9 |
(iii) Autonomous consumption =100 |
Answer:
\[C\,\,=\,\,\,\,\overline{c\,}+bY\] \[=\,\,100+\frac{0.9}{10}\times \,10000\] \[C\Rightarrow \,\,\text{Rs}\text{.}\,\,9.100\] \[\text{Investment}\,\,+\,\,=\,\,Y\,\,-\,\,C\] \[\Rightarrow \]\[10,000\,\,-\,\,9,100\] \[\Rightarrow \]Rs. 900
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