From the following data calculate a) equilibrium level of income b) to

1.	From the following data calculate a) equilibrium level of income b) total consumption expenditure at equilibrium level of national income. (i) C= 200+ 0.5Y is consumption function (ii) Investment is 1500.
Answer» At equilibrium AD = AS or C + I = Y 200 + 0.5 Y + 1500 = Y 1700 = 0.5Y , Y = 3400 Putting the value of Y in the eq C = 200 + 0.5 x 3400 , 200 + 1700, C = 1900

From the following data calculate a) equilibrium level of income b) total consumption expenditure at equilibrium level of national income. (i) C= 200+ 0.5Y is consumption function (ii) Investment is 1500.

Answer»

At equilibrium AD = AS or C + I = Y 200 + 0.5 Y + 1500 = Y

1700 = 0.5Y ,

Y = 3400

Putting the value of Y in the eq

C = 200 + 0.5 x 3400 , 200 + 1700, C = 1900

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From the following data calculate a) equilibrium level of income b) total consumption expenditure at equilibrium level of national income. (i) C= 200+ 0.5Y is consumption function (ii) Investment is 1500.

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