An economy is in equilibrium From the following data about an economy calculate autonomous consumption CBSE Economics class 12 2017
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An economy is in equilibrium. From the following data about an economy calculate autonomous consumption. - CBSE Economics class 12 2017

(i) Income = 500
(ii) Marginal propensity to save = 0.2
(iii) Investment expenditure = 800
(-Appeared in CBSE economincs class 12, 2017 Set 1-Delhi paper)


By:Aparna-Dasgupta

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Answers

Given that
Income (Y) = 5000
Marginal propensity to save (s) = 0.2
Therefore, marginal propensity to consume = 1 -0.2 =0.8
I= 800
As we know that
Y =C+I
C =Y -1
C = 5000 – 800 = 4200
c bar=  200
Thus, autonomous consumption is 200.


milan-ransingh

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