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Level Of Income Sample Assignment

Given consumption function
                                                                          
                                            C= Rs. 300 crores +2/3 Y
                                                                         

   We are given that the investment remains unchanged in the economy at Rs. 200 cores. Find the equilibrium level of income in the economy.
    We Know the standard form of consumption function is
                                                C = α +by
Where b is MPC
Also,we know
                                                 Y = C + I
Substituting (1) in Equation (2)
                                              Y =  α+by +1
                                         Y-by = (α +1)
                                       Y(1-b) = (α+1)
                                                         
                                               Y =     1   (α + I)
                                                      1 - b
                                               Y =k( α+ I)

Where K is investment multiplier.
 We are give that                            
                                             α = Rs.300 crores
                                              b= MPC = 2/3
                                       
                                              I= I₀ = Rs. 200 crores
                                              K= Investment Multiplier
                                                = __1___   =  __1__   =3
                                                   1-MPC        1-2/3
                                                   
Therefore                                 Y= 3 (Rs. 300 crores + Rs.200 crores)
                                                = 3 (Rs.500 crores)
                                                =Rs.1,500  crores

Thus,the equilibrium lvel of income at a given  level of investment of Rs. 200 crores and the MPC 2/3 is Rs  1, 500 crores.

Other Sample Assignments in Economics Homework Assignment :

Manufacturer Production Function	Price Elasticity Of Supply
Equalization Of Wages	Equilibrium Price Of Commodity
Poverty In India	Gross National Product
Consumption At Different Levels	Gross Domestic Product
Investment Decision	Expected Raturn
Level Of Income	Saving Equation
Equilibrium Level of Income	Equilibrium Level of National
Equilibrium GDP	Equilibrium level of GDP
Autonomous Investment	Calculate The Equilibrium GDP
Government Expenditure	Equilibrium Gdp Of Economy
Hypothetical Information	Equilibrium GDP Government
Equilibrium Level Of Inceome	Equation For Monetary Equilibrium
Calculate Saving Function	Equilibrim Level Of Income
Regardless Of The Level Of Income

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