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# Calculate Investment Expenditure from the Following Date About an Economy Which is in Equilibrium : National Income = 1000 Marginal Propensity to Save = 0.20 Autonomous Consumption Expenditure = 100 - CBSE (Arts) Class 12 - Economics

#### Question

Calculate investment expenditure from the following date about an economy which is in equilibrium :
National Income = 1000
Marginal propensity to save = 0.20
Autonomous consumption expenditure = 100

#### Solution

Given that

National income (Y) = 1000

Marginal propensity to save (MPS) = 0.20

Autonomous consumption expenditure = 100

MPC(c) = 1 - MPS = 1 - 0.20 = 0.8

As we know that

Y= C + I

Since C = barC + cY

We have

Y = barC + cY + I

1000 = 100 + 0.8(1000) + I

1000 = 900 + I

I = 100

Therfore, investment expenditure is Rs 100.

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#### APPEARS IN

Solution Calculate Investment Expenditure from the Following Date About an Economy Which is in Equilibrium : National Income = 1000 Marginal Propensity to Save = 0.20 Autonomous Consumption Expenditure = 100 Concept: Classification of Expenditure.
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