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NextQ95

In an economy ; C = 200 + 0.75 Y (where C is consumption expenditure and Y is National Income). Investment expenditure is Rs. 4,000 Crore. Calculate the following : (i) Equilibrium level of income. (ii) Total consumption expenditure at equilibrium income level. Explain the adjustment mechanism in case ex-ante savings are greater than ex-ante investments.

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Question 94

Suppose, the value of Average Propensity to Consume (APC) is 0.8 and National Income is Rs. 4,000 crores, the value of saving would be Rs. _______ crores. (Choose the correct option to fill up the blank)

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