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Question : In an economy, the investment expenditure is Rs. 80 crore and consumption function is C= 80+0.75Y. Calculate equilibrium level when planned investment expenditure is decreased by Rs. 20 crore.

Option 1: 540

Option 2: 560

Option 3: 800

Option 4: 600


Team Careers360 10th Jan, 2024
Answer (1)
Team Careers360 20th Jan, 2024

Correct Answer: 560


Solution : C= 80+0.75Y

I= 80-20= 60

Y= C+I

Y= 80+0.75Y+60

0.25Y= 140

Y= 560 crore

Hence, Option B is correct.

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