Question : In a two sector economy, the saving function is given as S=-10+0.4Y and investment function is expressed as I=-4+0.1Y. Calculate equilibrium level of income?
Option 1: 20
Option 2: 30
Option 3: 15
Option 4: 10

Question

Question : In a two sector economy, the saving function is given as S=-10+0.4Y and investment function is expressed as I=-4+0.1Y. Calculate equilibrium level of income?

Option 1: 20

Option 2: 30

Option 3: 15

Option 4: 10

Team Careers360 · Accepted Answer

Correct Answer: 20

Solution : Equilibrium,

S=I

-10+0.4Y=-4+0.1Y

0.3Y=6

Y= 20

Hence, Option A is correct.

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Question : In a two sector economy, the saving function is given as S=-10+0.4Y and investment function is expressed as I=-4+0.1Y. Calculate equilibrium level of income?Option 1: 20Option 2: 30Option 3: 15Option 4: 10

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Question : In a two sector economy, the saving function is given as S=-10+0.4Y and investment function is expressed as I=-4+0.1Y. Calculate equilibrium level of income?
Option 1: 20
Option 2: 30
Option 3: 15
Option 4: 10