1.

An economy is in equilibrium Calculate inverstment experditure from the following : National income `=800,MPS=0.3 ,Autonomous cons.=100

Answer» since MPS =0.30 therefore MPC = 0.70
`Y=C+I`
` =barC +by +I`
`80=100+0.7x800+I`
`(MPC=1-.3=.7) `
`800=100 +560+I`
`800=660+I`
I=800-66=140`
Investment expenenditure = 140


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