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

```
4 months ago Rituraj Tiwari
1789 Points
```							If MPS=0.20, thenMPC= 1-MPS= 1-0.20= 0.80Consumption 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=ADY= 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.140thank you
```
4 months 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=ADY= 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
```
4 months ago
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