In an economy equilibrium level of income is Rs. 12,000 crore. The ratio of MPC to MPS is `3 : 1`. Calculate the additional investment needed to reach a new equilibrium level of Rs. 20,000 crore.
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Estimate the value of ex-ante AD, when autonomous investment and consumption expenditure (A) is 50 crore and MPS is 0.2 and level of income is 300cror
`AD=C+I` `AD=(bar(C )+bY)+bar(I)` `=(bar(C)+bar(I))+bY` `=A+bY` `=50+0.8(300)` `=50+240` =290 crore. NOTE: `A= bar(C )+bar(I)` =Autonomous consumption of autonomous investment expenditure 2. `MPC=1-MPS=1-0.2=0.8`
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Calculate MPC from the following data about an economy which is in equilibrium: National income=2000, Investment expenditure=100, Autonomous consumpti
`Y=C+I` `Y=(bar(C )+By)+I` `b(2000)=1700 [At equiilbrium S=I=100 2. 1-b=MPS=0.3` `b(1700)/(2000)=0.85` Hence, MPC=0.85
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An increase ₹250 crores in investment in an economy resulted in total increase in income of ₹1000 crore. Calculate the following : (a) MPC (b) Change
Multiplier(K)=`(DeltaY)/(DeltaI)=1000/250` or K=4 `K=1/(1-MPC)` `4=1/(1-MPC)` or 4-4MPC 4MPC=3 or `MPC=3/4=0.75` `MPC=(DeltaC)/(DeltaY)` or `0.75=(DeltaC)/1000` `DeltaC=₹750 ` crore `DeltaS=DeltaY-DeltaC=1000-750=₹250` crore
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An economy is in equilibrium. From the following data, calculate MPS. (i) Income=10,000 (ii) Autonomous consumption =500 (iii) Consumption expenditure
`C=barC+bY` 8000=500+b(10,000) b(10,000)=7500 `b=(7500)/(10,000)=0.75` or MPC=0.75 We know that MPC + MPS =1 0.75+MPS=1 MPS=1-0.75
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In an economy, the actual level of income is ₹ 500 crores whereas full employment of Y is ₹ 800 crore. MPC = 0.75. Calculate how much change in invest
`" "K= (1)/(1-MPC)= (100)/(25) = 4` `" "K=4` `" "K= (Delta Y)/(Delta I)` `" "4= (800-500)/(Delta I)` `" "Delta I = (300)/(4) = ₹ 75` crore `{:(,"(Rs. in crores)"),("Full employment...
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Measure the level of ex-ante aggregate demand when autonomous investment and consumption expenditure (A) is 50 crore, and MPS is 0.2 and level of inco
MPC=1-MPS=1-0.2 MPC=0.8 Y=400 crores `AD=C+bar(I)=bar(C )+bY+bar(I)` `AD=bar(A)+bY "where", bar(A)=bar(C )=bar(I)` `=50+(0.8)(4000)=3250"crore"` AS or Y=4000 Here, ` 3250 lt 4000 or AD lt AS` Hence, aggregate demand is less than aggregate...
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It is planned to increase national income by 1000 crore. Calculate, how much increase in investment is required to achieve this goal. Assume that MPC
Correct Answer - 400 crore
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In an economy with every increase in income 15% of the increased income is saved. Suppose a fresh investment of 600 crore takes place in the economy,
4000 crore, 3400 crore
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In an economy `C=500+0.9 Y` and `I=1,000` (where `C=` consumption, `Y=` income, `I=` investment). Calculate the following : (i) Equilibrium level of i
given `Y=C+I` (i) `Y=500+0.9 Y+1000` `Y=1500+0.9 Y` or `0.1 Y=1,500` `Y=` Rs. `15,000` (ii) `C=Y-I=15,000-1,000=` Rs. `14,000`.
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In an economy, `C=1000+0.5 Y` and `I=2,000`, calculate : (i) Equilibrium level of income. (ii) Saving at equilibrium level of income.
(i) `Y=C+I=1000+0.5 Y+2000=3000+0.5 Y` or `0.5 Y=3000` `Y=6000` (ii) `S=Y-C=6000-(1000+0.5xx6000)`. `=6000-4000=2000`.
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