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
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