Question : In an economy, the investment expenditure is Rs. 80 crore and consumption function is C= 80+0.75Y. Calculate equilibrium level when planned investment expenditure is decreased by Rs. 20 crore.
Option 1: 540
Option 2: 560
Option 3: 800
Option 4: 600
Answer (1)
20th Jan, 2024
Correct Answer: 560
Solution : C= 80+0.75Y
I= 80-20= 60
Y= C+I
Y= 80+0.75Y+60
0.25Y= 140
Y= 560 crore
Hence, Option B is correct.
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