Advertisement Remove all ads

Find Equilibrium National Income: Autonomous Consumption Expenditure = 120 Marginal Propensity to Consume = 0.9 Investment Expenditure = 1100 - Economics

Advertisement Remove all ads
Advertisement Remove all ads
Advertisement Remove all ads

Find equilibrium national income:

Autonomous consumption expenditure = 120

Marginal propensity to consume = 0.9

Investment expenditure = 1100

Advertisement Remove all ads

Solution

Given that

I = Rs 1100

Marginalpropensity toconsume 0.9

`barC` = Rs 120

Y = ?

As we know that

Y = C + I

Y = `barC+`

Y = 120 + 0.9 x Y + 1100

Y = 0.9 x Y + 1220

Y = 12,200

Concept: Consumption Function and Propensity to Save
  Is there an error in this question or solution?

Video TutorialsVIEW ALL [1]

Advertisement Remove all ads
Share
Notifications

View all notifications


      Forgot password?
View in app×