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| 1. |
The consumption function for and economy is given as: C = 200 + 0.8Y. (i) Determine the value of MPC and MPS, (ii) Autonomous Consumption, (iii) Derive the corresponding saving function, (iv) Calculate consumption at the income levels of ₹ 3,000 crores and ₹ 5,000 crores. (v) Determine the break-even level of income. |
| Answer» (i) MPC = 0.8, MPS = 0.2, (ii) Autnomous Consumption= ₹ 200 crores (iii) S=-200+0.20Y,(iv) ₹ 2,600 crores and ₹ 4,200 crores, (v) ₹ 1,000 crores | |