Calculate Autonomous Consumption Expenditure from the following data about an economy which is in equilibrium.

Question

Calculate Autonomous Consumption Expenditure from the following data about an economy which is in equilibrium.

National Income = 1,200

Marginal Propensity to Save = 0.20

Investment Expenditure = 100

Monjur Alahi

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2025-01-04 04:42

1 Answers

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Salim Ahmed Kawsar · Accepted Answer · 2023-02-05T15:29:48+06:00

Salim Ahmed Kawsar

Y = C + I

and C = C bar + b(Y)

or Y = C bar + b(Y) + I

MPC = 1 - MPS

= 1 - 0.2 = 0.8

1,200 = C bar + 0.8 x 1,200 + 100

or C bar = 1,200 - 960 - 100

= 1,200 - 1,060

= Rs. 140

5 views Answered 2023-02-05 15:29