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प्रश्न
C = 100 + 0.4 Y is the Consumption Function of an economy where C is Consumption Expenditure and Y is National Income. Investment expenditure is 1.100. Calculate
(i) Equilibrium level of National Income.
(ii) Consumption expenditure at equilibrium level of national income.
उत्तर
Given that
C = 100 + 0.4Y
I = 1100
(i) Equlibrium level of National Income
At equilibrium level, AD = AS or Y = C + I
By substituting the values of C and I in the formula, we get
Y = 100 + 0.4Y + 1100
Y - 0.4Y = 100 + 1100
0.6Y = 1200
Y = `1200/0.6` = 2000
(ii) Consumption expenditure at equlibrium level of National Income
C = 100 + 0.4Y
By substituing the value of national income at equlibrium level in the formula, we get
C = 100 + 0.4(2000)
C = 100 + 800 = 900
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संबंधित प्रश्न
With the increase in income, both consumption and savings increase.
Which of the following affects national income? (Choose the correct alternative)
(a) Goods and Service tax
(b) Corporation tax
(c) Subsidies
(d) None of the above
Calculation National Income and Personal Disposable Income:
| (Rs crores) | ||
| 1 | Personal tax | 80 |
| 2 | Private final consumption expenditure | 600 |
| 3 | Undistributed profits | 30 |
| 4 | Private income | 650 |
| 5 | Government final consumption expenditure | 100 |
| 6 | Corporate tax | 50 |
| 7 | Net domestic fixed capital formation | 70 |
| 8 | Net indirect tax | 60 |
| 9 | Depreciation | 14 |
| 10 | Change in stocks | (-)10 |
| 11 | Net imports | 20 |
| 12 | Net factor income to abroad | 10 |
Calculation National Income and Personal Disposable Income:
| (Rs crores) | ||
| 1 | Rent | 100 |
| 2 | Net current transfers to rest of the world | 30 |
| 3 | Social security contributions by employers | 47 |
| 4 | Mixed income | 600 |
| 5 | Gross domestic capital formation | 140 |
| 6 | Royalty | 20 |
| 7 | Interest | 110 |
| 8 | Compensation of employees | 500 |
| 9 | Net domestic capital formation | 120 |
| 10 | Net factor income from abroad | (-)10 |
| 11 | Net indirect tax | 150 |
| 12 | Profit | 200 |
Give reasons or Explain the following statements
Services of housewives are excluded from national income.
In an economy, S = −100 + 0.6 Y is the saving function, where S is Saving and Y is National Income. If investment expenditure is 1,100, calculate:
(1) Equilibrium level of National Income
(2) Consumption expenditure at equilibrium level of National Income.
Distinguish between.
Personal income and National Income.
(b) decreases
(c) becomes equal
(d) becomes zero
Give reasons or explain the following statements:
The net national income is less than gross national income.
Distinguish between Illegal income and Transfer income.
Distinguish between:
Net national product and Net domestic product.
Write short note on:
Personal disposable income
State whether the following statement is true or false.
Services of housewives are included in national income.
Define the following:
Income from property and entrepreneurship
Nominal GNP is same as ____________.
Which one is true?
Net National Income at Factor Cost is called?
Which of the following is correct?
Give economic term:
The volume of commodities and services turned out during a given period counted without duplication.
Explain the meaning of national income.
