Answer:
C =100+0.5Y, Substituting the values of Y as 400, 500 and 600, we get the schedule as below:
In the given schedule, we can observe that as income rises, APC declines from 0.75 to 0.67. Thus, as income is increasing, APC is decreasing. It is given that, Investment Expenditure (I) =Rs.400, and consumption [C]=100+0.5 Y We know that, Income (Y)=C+I On substituting the value of C and I, we get \[Y=100+0.5Y+400\Rightarrow Y-0.5Y=500\] \[0.5Y+500\Rightarrow Y=\frac{500}{0.5}=1,000\] So, when investment is Rs.400, Income is Rs. 1,000. Y C APC\[=\frac{C}{Y}\] 400 300 0.75 500 350 0.70 600 400 0.67
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