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Question : The saving function of an economy is given as S= -40+0.40Y. If the planned investment is Rs. 250 crore, Calculate equilibrium level of income in the economy.

Option 1: 725

Option 2: 755

Option 3: 780

Option 4: 800


Team Careers360 2nd Jan, 2024
Answer (1)
Team Careers360 14th Jan, 2024

Correct Answer: 725


Solution : Equilibrium,

S=I

-40+0.40Y=250

0.40Y= 290

Y= 725 crore

Hence, Option A is correct.

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