Assume the consumption function of an economy is and investment is Rs. 40 crore. The equilibrium level of income equals
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4 marks, −1MacroeconomicsKeynesian cross and the multiplierKeynesian cross equilibriumModerateabout 1 min
CUET-PG 2020 Question 44: Keynesian cross and the multiplier
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Assume the consumption function of an economy is C = Rs.30 crore + 0.8Y and investment is Rs. 40 crore. The equilibrium level of income equals (A) Rs. 150 crore (B) Rs. 350 crore (C) Rs. 55 crore (D) Rs. 10 crore
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What this question tests
This question is on Keynesian cross equilibrium, part of Keynesian cross and the multiplier in Macroeconomics.
How income is determined when output adjusts to planned spending, and what happens to unplanned inventories.
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