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In an economy S = -100 + 0.6 Y is the saving function, where S is saving and Y is National Income. If investment expenditure is 1100, calculate : 1- Equilibrium level of National Income. 2- Consumption expenditure at equilibrium level of National Income. |
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Answer» 1. S = I -100 + 0.6 Y = 1100 0.6 Y = 1200 Y = 1200/0.6 = 2000 2. Y = C + S C = Y - S = 2000 - 1100 = 900 |
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