Question

2. The saving function of an economy is given as S= -25+0.25Y. If the planned

investment is Rs. 200Crs,calculate: 3

a. Equilibrium level of income in the economy

b. Aggregate demand at income level of Rs. 500Crs.​

Answer 1

Answer:

Income =900 cr

AD = 450 cr

Explanation:

AD = C+I

C= ~c+bY +I