From the data given below about an economy. Calculate:
From the data given below about an economy.
Calculate:
(a) InvestmentExpenditure.
(b) ConsumptionExPenditure.
(i) Equilibrium level of income Rs. 5,000
(ii) Autonomous ConsumPtion Rs. 500
(iii)Marginal Propensity to Consume 0.4
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(a) Y = C + I
C = 500 + 0.4Y
So, Y = 500 + (0.4Y x 5,000) + I
5,000 = 500 + 0.4 x 5,000 + I
I = 2,500
(b) C = 500 + 0.4 x 5,000
= 2,500
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