Find national income from the following:
Autonomous consumption = Rs100
Marginal propensity to consume = 0.80
Investment = Rs 50
Advertisement Remove all ads
Solution
C = Rs 100
MPC (b) =0.80
I= Rs 50
At equilibrium,
Y=C+I
or `Y=barC+bY+I`
By substituting the values, we get
Y=100 + 0.8Y + 50
0.2 Y = 150
Y= Rs 750
National Income =Rs 750
Concept: Concept of National Income
Is there an error in this question or solution?
Advertisement Remove all ads
APPEARS IN
Advertisement Remove all ads
Advertisement Remove all ads