Calculate "Investment Expenditure" from the following data about an economy which is in equilibrium:
Calculate "Investment Expenditure" from the following data about an economy which is in equilibrium:
National Income = 700
Marginal Propensity to Consume = 0.8
AutonomousConsumptionExpenditure = 70
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Y = C + I
we know, C = C bar + b(Y)
or Y = C bar + b(Y) + I
700 = 70 + 0.8(700) + I
or 700 = 70 + 560 + I
or I = 700 - 630
or I = 70
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