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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 increased by Rs. 10 crore.

Option 1: 680

Option 2: 650

Option 3: 700

Option 4: 600


Team Careers360 15th Jan, 2024
Answer (1)
Team Careers360 19th Jan, 2024

Correct Answer: 680


Solution : C= 80+0.75Y

I= 80+10=90

Y=C+I

Y= 80+0.75Y+90

0.25Y= 170

Y= 680

Hence, Option A is correct.

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