Question

The saving function of economic is given s=-10+0.2y in the investment are rs 240 cr calculate the following.
1. equlibrium level of income of economy
2. additional investment which will be needed to double the present level of equlibrium income ​

Answer 1

Explanation:

At equilibrium level of income, Savings = investment

=>−10+0.2Y=−3+0.1Y−10+0.2Y=−3+0.1Y

=>0.2Y−0.1Y=−3+100.2Y−0.1Y=−3+10

=>0.1Y=70.1Y=7

=> Y=70Y=70

Equilibrium level of Income = 70