+91-87964 74404
FlagBACK
Question icon
8 grade maths

Calculate autonomous consumption expenditure from the following date about an economy which is In equilibrium.
National income = Rs. 1,200
Marginal propensity to save = 0.20
Investment expenditure = Rs. 100
(Autonomous Consumption Expenditure = 140)

Profile image of Vikas Amritiya
5 Years agoGrade
Answers icon

2 Answers

Profile image of Rituraj Tiwari
5 Years ago
If MPS=0.20, then
MPC= 1-MPS= 1-0.20= 0.80
Consumption Function is C = c + 0.80 Y where Y in the income in the economy and c= Autonomous consumption.
At equilibrium level of output,
AS=AD
Y= C+I
=> 1,200 = c + 0.80 (1,200) + 100
=> 1,200 = c+ 960 + 100
=> 1,200 = c+ 1,060
=> c = 1,200- 1,060 = Rs.140

thank you
Profile image of ankit singh
5 Years ago

 

If MPS=0.20, then 
MPC= 1-MPS= 1-0.20= 0.80 
Consumption Function is C = c + 0.80 Y where Y in the income in the economy and c= Autonomous consumption. 
At equilibrium level of output,
 AS=AD
Y= C+I 
=> 1,200 = c + 0.80  (1,200)  + 100
=> 1,200 = c+ 960 + 100 
=> 1,200 = c+ 1,060
=> c = 1,200- 1,060 = Rs.140 

Other Related Questions on 8 grade maths

question mark

WHAT ARE THE FORMULAS FOR FINDING THE INITAL SPEED

8 grade maths
1 Answer Available

Last Activity: 9 Months ago

question mark

What is the formula of \[{x^2} + {y^2} + {z^2}?\

8 grade maths
1 Answer Available

Last Activity: 1 Year ago

question mark

What is a dodging number?

8 grade maths
1 Answer Available

Last Activity: 1 Year ago

question mark

What is the value of $ 5 $ million dollars in Indian rupees given that one dollar is equal to $ 75 $ Indian rupees.

8 grade maths
1 Answer Available

Last Activity: 1 Year ago

question mark

How many perfect cubes can you find from 1 to 100? How many from -100 to 100?

8 grade maths
1 Answer Available

Last Activity: 1 Year ago