Question
Find national income from the following:
| Autonomous consumption | Rs. 100 |
| Marginal Propensity to consume | Rs. 0.80 |
| Investment | Rs. 50 |
Solution
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.
