Economy, asked by projectneeds, 1 year ago

Calculate consumption expenditure from the following data.
Income = 3000
MPC = 0.8
Autonomous Consumption = 200.​

Answers

Answered by ladolakhya1989
4

Answer:

If Autonomous consumption 200 and MPC= 0.9, then

Consumption Function, C = 200+ 0.9 Y where Y in the income in the economy.

So at national income 10,000, consumption is

C = 200+ 0.9 ( 10,000)

= 200 + 9,000

= 9,200

At equilibrium,

National income= consumption + investment

=> Investment= Y- C

=> Investment= 10,000-9,200= 800.

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