Q.21 The value of marginal propensity to consume is 0.6 and initial income in the economy is ₹ 100 crores . prepare a schedule showing Income , consumption and saving . Also show the equilibrium level of income by assuming autonomous investment of ₹ 80 crores .


 

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Hi rise

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the answer will be 
mpc | investment | income | consumption | savings
0.6   |   80 cr         |   100 cr |  60 cr              |   40 cr
0.6   |    80 cr        |   150cr  |   90 cr             |    60 cr
0.6   |    80cr         |   200cr  |   120cr            |    80 cr                                               
 so equilibrium will be when S=I ,hence when income is 200 cr
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