1.

The ratio of MPC and MPS is 4:1. The consumption at zero level of income is Rs. 40 crores. (a) Frame a consumption equation (b) Value of multiplier (c) Break-even level of income OR The consumption equation is C = 125 + 0.5Y. (a) Calculate break-even level of income. (b) Calculate investment if the equilibrium level of income is Rs. 400 crores.

Answer»

The ratio of MPC and MPS is 4:1. The consumption at zero level of income is Rs. 40 crores.

(a) Frame a consumption equation

(b) Value of multiplier

(c) Break-even level of income

OR

The consumption equation is C = 125 + 0.5Y.
(a) Calculate break-even level of income.
(b) Calculate investment if the equilibrium level of income is Rs. 400 crores.



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