Question : Using the consumption function, Calculate consumption at income level of 2500 crore, if autonomous consumption is 100 crore and 40% of additional income is consumed.
Option 1: 1000
Option 2: 1100
Option 3: 900
Option 4: 800
Correct Answer: 1100
Solution : MPC= 0.4
C= 100+0.4(2500)
C= 1100
Hence, Option B is correct.
Question : Using the consumption function, Calculate saving at income level of 2500 crore, if autonomous consumption is 200 crore and 60% of additional income is consumed.
Question : The equilibrium level of income in an economy is Rs. 3000 crore. The autonomous consumption expenditure is equal to Rs.250 crore and investment expenditure is Rs. 1000 crore. Calculate consumption expenditure.
Question : The consumption expenditure and investment demand are Rs. 500 crores and Rs. 300 crore respectively when the income level is Rs. 1000 crores Calculate AD.
Question : On the basis of consumption function: C=100+0.8Y. Determine saving at the income level of Rs.800.
Question : In an economy, equilibrium level of income falls short by Rs.400 crore. Calculate the additional investment needed to achieve the equilibrium level of income, 80% of the increased income is spent on consumption.
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