Question

the break even point of the economic and income level of 500 Crore determine the level of income when saving is 600 croren​

Answer 1

Income is 100 crore.

Investment is 80 crore

MPC = 0.6

MPS = 1 - MPC

MPS = 1- 0.6

MPS = 0.4

AD = C+ I

AD = 0.6 Y + 80

AS = AD

Y = 80 + 0.6 (100)

100 = 80 + 0.6 (100)

100 = 80 + 60

100 = 140

Hence this shows that the economy is not in equilibrium as the aggregate demand is greater than aggregate supply.