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 increased by Rs. 10 crore.
Option 1: 680
Option 2: 650
Option 3: 700
Option 4: 600
Answer (1)
19th Jan, 2024
Correct Answer: 680
Solution : C= 80+0.75Y
I= 80+10=90
Y=C+I
Y= 80+0.75Y+90
0.25Y= 170
Y= 680
Hence, Option A is correct.
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