Calculate equilibrium level of income for a hypothetical economy, for which it is given that:
a) Autonomous s Investments = ₹ 500 crores, and
b) Consumption function, C = 100 + 0.80Y
Answer.
Given Consumption function is,
C=100+0.8 Y Autonomous investments=500 crores We know, at equilibrium level
Y=C+I
Y=100+0.8 Y+500
Y-0.8Y=600
0.2 Y =600
Y= ₹ 3,000 crores
