Question

Answer find MPS , economy is in Equilibrium, Y is 500 , Investment is 70 , and -S is 30??

Answer 1

Heya...

Solution :-
___________

Given ____

National income ( Y ) = 500
Autonomous saving = -30
Investment (I) = 70

At equilibrium level ...

S = I

Autonomous saving + MPS (Y) = I
-30+MPS(500) = 70
500(MPS) = 70+30
500(MPS) = 100

MPS = 100/500

= 0.2 Answer ...

Thank you

Answer 2

MPS =

Saving + MPS(Y) = I

-30+x(500) = 70

x = 100/500

=0.2