Question

1.)If GDP at mp is 5000, intermediate consumption is 2500, and ratio of sales to change in stock is 2:1 . then sales will be :-
a) 4000
b) 5000
c) 3000
d) 2000

2)If consumption function of an economy is given by C= 100+0.8Y and autonomous investment expenditure is 300 , then equilibrium level of income will be :-
a) 4000
b) 3000
c) 2000
d) 1000

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Answer 1

Answer:

a is the answer of your question ok

Answer 2

Given:

1.)If GDP at mp is 5000, intermediate consumption is 2500, and the ratio of sales to change in the stock is 2:1.  

2)If the consumption function of an economy is given by C= 100+0.8Y and autonomous investment expenditure is 300

To Find:

1.) then sales will be

a) 4000

b) 5000

c) 3000

d) 2000

2)then the equilibrium level of income will be

a) 4000

b) 3000

c) 2000

d) 1000

Solution:

(1) Gross domestic product (GDP) is given as 5000,

Also, given that the ratio is

$\frac{sales}{change in stock}=2\\sales=2*change in stock$

Then,

Sales= GDP at MP- Change in stock+ Intermediate consumption

2*change in stock=5000-change in stock+2500

change in stock=2500

So the amount of sales is using the given ratio,

Sales=2*2500

         =5000

Hence, the correct option is (b).

(2) The equilibrium level of income will be counted as,

The equilibrium level of income (Y) = consumption expenditure (C)+ investment expenditure(I)

Y=100+0.8Y+300

0.2Y=400

Y=2000

So the value of equilibrium level of income is 2000.

Hence, the correct option is (C).