question_answer

Find Investment from the following:

National Income = Rs. 600

Autonomous Consumption = Rs. 150

Marginal propensity to consume = 0.70

Answer:

Given, National Income (Y) = Rs. 600

Autonomous Consumption (a) = Rs. 150

MPC (b) = 0.70

\[\therefore \]      \[Y=a+bY+I\]

or         \[600=150+0.7\times 600+I\]

or         \[600=150+420+I\]

or         \[600-570=I\]

or          I = 30