Question

Value of mpc is 0.6 and initial income is 100.draw a schedule of income ssv8ng and cosumption.aldo show equikibrium lrvel of income were autonomous investment is 80.

Answer 1

here is the solution of prescribed question

Answer 2

Value of MPC is 0.6 and initial income is 100.draw a schedule of income saving and consumption. Also show equilibrium level of income were autonomous investment is 80.

The given elements are:

Marginal Propensity to consume (MPC) =0.6

Initial Income = 100

Autonomous income= 80

Therefore,

        ------

  C =  C  + C(Y)*100

  C =  0    +0.6Y

Income Consumption Savings Investment

     100    60           40             80

200 1 20  80                                      80

300 180 120 80

400 240 160 80

500 300 200 80

Aggregate demand = Aggregate Supply

AD = C+I and AS= C+S

So the Equilibrium level of income is = Rs 200 crores.