Calculate investment expenditure from the following data about an economy which is in equilibrium : National Icome = 1000, MPs = 0.2, Autonomous consu

Question

Calculate investment expenditure from the following data about an economy which is in equilibrium : National Icome = 1000, MPs = 0.2, Autonomous consu

Calculate investment expenditure from the following data about an economy which is in equilibrium : National Icome = 1000, MPs = 0.2, Autonomous consumption 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` (at equilibrium )
or `Y = (barC + bY) +1`
` 1000 =100 + 0 .8(1000) +1" " (MPC = 1- MPS rArr 1- 0.2 =0.8)`
`1000 = 100 + 800 +I`
`I = 1000-900 = 100`
Hence investment expenditure = 100.

4 views Answered 2023-02-05 15:29