Question

In an economy C= 200+ 0.5 Y is the consumption function where C is the consumption
expenditure and Y is the national income. Investment expenditure is 400 crores. Is the
economy in equilibrium at an income level 1500 crores? Justify your answer.

Answer 1

Have you ever worked a job? Bought a hamburger? Purchased a video game at a local game store? If so, you've participated in what the business community calls economic activities. Economic activities are those steps related to the consumption of goods and services and activities in which money is exchanged for a product or service.

Economic activities are performed for the purpose of making money, gaining wealth, and creating and producing items that can be offered to the public for sale. Restaurants, large retailers and even small businesses engage in economic activities every day. The outcome of economic activities is measured monetarily.

By contrast, non-economic activities are those performed without money in mind. Maybe you volunteered at a local animal shelter or worked to prepare care packages for the military. Non-economic activities are conducted voluntarily, typically out of a sense of affection, sympathy or similar emotion. It could be related to a social cause, a religious preference, a recreational choice or a charitable goal. In non-economic activities, money is not a determining factor and cannot be used to measure the outcome; rather, that is measured in satisfaction, fulfillment and happiness.