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Economics · 2023 · 4 marks
Determination of Income and EmploymentDetermination of Income in Two-sector Model4 marksApplyshort answer
CBSE 2023 · Region 4 · Set 2 · Q14
An economy is in equilibrium. From the following data, calculate the value of Autonomous Consumption.National Income = ₹ $\displaystyle 5,000$ croreMarginal Propensity to Save (MPS) = $\displaystyle 0$·$\displaystyle 2$Investment Expenditure = ₹ $\displaystyle 800$ crore
Marking-scheme solution
Given, Y = ₹ $\displaystyle 5,000$ croreMPS = $\displaystyle 0.2$MPC = $\displaystyle 1$ − MPS = $\displaystyle 1$ − $\displaystyle 0.2$ = $\displaystyle 0.8$As we know, at the equilibrium level Y = C + I$\displaystyle 5{,}000 = \bar{C} + (0.8)(5{,}000) + 800$$\displaystyle 5{,}000 = \bar{C} + 4{,}800$$\displaystyle \bar{C}$ = $\displaystyle 5,000$ − $\displaystyle 4,800$ = ₹ $\displaystyle 200$ crore
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CBSE Class 12 Economics past-paper question from the 2023board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.