Calculate the Equilibrium level of Income for an imaginary economy, if it is given that :

(a)

Consumption function, C = $\displaystyle 400$ + $\displaystyle 0$·$\displaystyle 6$ Y

(a)

where C = Consumption, Y = Income

(b)

Autonomous Investments (I$\displaystyle _0$) = ₹ $\displaystyle 2,000$ crore

Given, Consumption Function C = $\displaystyle 400$ + $\displaystyle 0$·$\displaystyle 6$ Y Autonomous Investment (I) = ₹ $\displaystyle 2,000$ croreWe know that, at equilibrium level Y = C + I Y = $\displaystyle 400$ + $\displaystyle 0$·$\displaystyle 6$ Y + $\displaystyle 2,000$ $\displaystyle 0$·$\displaystyle 4$ Y = $\displaystyle 2,400$ Y = ₹ $\displaystyle 6,000$ croreThus, Equilibrium level of Income = ₹ $\displaystyle 6,000$ crore