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Determination of Income and Employment
Question
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Find national income from the following:
Autonomous consumption Rs. 100
Marginal Propensity to consume Rs. 0.80
Investment Rs. 50

Answer

Computation of national income:
C= Rs 100
MPC = .80
I = Rs 50
At Equilibrium, 
Y=C+I
or, Y = C+By+I
Substituting the values,
Y= 100+0.8Y+50
Or 2.Y=150
Or Y= Rs 750
National income =Rs 750.

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