find investment from the following :
national income = Rs.800 cr.
autonomous consumption = Rs.50 cr.
MPC = 0.8
Dear Student,
National Income (Y) = Rs. 800 cr.
Autonomous Consumption () = Rs. 50 cr.
MPC = 0.8
Consumption (C) = + MPC(Y)
= 50 + 0.8(800) = 690
Investment (I)= ?
Y=C+I
800 = 690 + I
I = 110
Thus, Investment = Rs. 110 cr.
Regards
National Income (Y) = Rs. 800 cr.
Autonomous Consumption () = Rs. 50 cr.
MPC = 0.8
Consumption (C) = + MPC(Y)
= 50 + 0.8(800) = 690
Investment (I)= ?
Y=C+I
800 = 690 + I
I = 110
Thus, Investment = Rs. 110 cr.
Regards