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12th Class Economics Solved Paper - Economics 2015 Outside Delhi Set-I

  • question_answer
    An economy is in equilibrium. Calculate the Investment Expenditure from the following:
    National Income = 800                           
    Marginal Propensity to Save = 0.3
    Autonomous Consumption =100                  
     

    Answer:

    Given                                     
                        Y = 800                                 
                MPS(s) = 0.3                                   
    i.e.     \[MPC\left( c \right)=1-MPS=1-0.3=0.7\]
                        C = 100
    We know that at equilibrium,
                        \[Y=C+I\]
                        \[C=ab+by\]
                            \[=100+0.7y\]
    By putting the value of Y & C
                     \[800=100+0.7(800)+I\]
                     \[800=100+560+I\]
                          \[I=800-660\]
                           I= Rs. 140
    Thus, the Investment expenditure is Rs. 140.


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