1.

An economy is in equilibrium. From the following data about an economy calculate autonomous consumption. (a) lncome = 5000 (b) Marginal propensity to save = 0.2 (c) Investment expenditure = 800

Answer» `Y=C+I`
`Y=overset(-)C+MPC(Y)+I`
`5000=overset(-)C+(1-0.2)(5000)+800`
`overset(-)C=5000-8//10xx5000-800`
`overset(-)C=5000-4000-800`
`=200`


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