Economy, asked by simransingh8810, 1 month ago

An economy is characterized by following data:
C= 30Cr+0.75Yd [note: Yd-Y-T]
I= 10ocr
G= 200 cr
T= 50 cr
Calculate an equilibrium level of income & consumption​

Answers

Answered by dinkernitinbad
0

Answer:

290000-/ is answer of this question

Answered by AadilAhluwalia
0

In simple language equilibrium level of income means that the economy is having an equal amount of production and market demand.

  • For the calculation of the equilibrium, it is important to remember that to lead to equilibrium our Aggregate demand must be equal to aggregate supply
  • The formula for the same is:

Y = C+I+G

Here,

C = 30 + 0.75 Yd

Yd = Y-T

G = 200

T = 50

Putting the values in the formula:

Y = 30 + 0.75(Y-50) + G+ I

= 30 + 0.75 Y - 37.5 + 200 + 100

Y - 0.75 Y = 30 + 262.5

0.25 Y = 292.5

Y = 292.5/0.25

= 1170

  • For calculating consumption we need to put the values in the formula: C = 30 + 0.75 ( Y - T)

C = 30 + 0.75 ( 1170- 50)

= 30 + 0.75 × 1120

= 30 + 840

= 870 Cr

Thus, Consumption is 870 Cr

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