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Question
Find Consumption Expenditure from the following:
|
National Income |
= Rs 5,000 |
|
Autonomous Consumption |
= Rs 1,000 |
|
Marginal propensity to consume |
= 0.80 |
Solution
Given
NationalIncome=`Rs 5,000`
Autonomous Consumption= Rs`1,000`
MPC=`0.80`
We know,
C=`barc`+ by
Substituting the values,
C=1000+0.8xx5000
or, C=Rs 5000
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