Question

given the following information about an Economy C =100+ 0.8y I= Rs. 50 crore (a) what is the level of saving in Equilibrium?(b) If for Somereason , output were at the level of Rs. 800 crore What would be the level of unplanned inventory accumulated would be?​

Answer 1

Answer:

In an economy, S=I at equilibrium

S=₹50crores

Now , at the point of equilibrium

AD=Y

C+I=Y

100+0.8Y+50=Y

150=0.2Y

Y=₹750 crores

AD=₹750 crores

Also, AD=AQ at equilibrium

However ,AQ=₹800crore

Hence,level of unplanned inventory=AQ-AD=800-750=₹50crores

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