✓ Board-verified
Economics · 2023 · 4 marks
Determination of Income and EmploymentDetermination of Income in Two-sector Model4 marksApplyshort answer
CBSE 2023 · Region 3 · Set 2 · Q15
Suppose the following information is given about a hypothetical economy :C = $\displaystyle 200$ + $\displaystyle 0.75$ Y (where, C = Consumption and Y = Income)I₀ = $\displaystyle 300$ (I₀ = Autonomous Investment)Calculate the following on the basis of the given information :(a)Equilibrium Level of Income(b)Aggregate Demand at Equilibrium Level of Income(c)Marginal Propensity to Save
Suppose the following information is given about a hypothetical economy :
C = $\displaystyle 200$ + $\displaystyle 0.75$ Y (where, C = Consumption and Y = Income)
I₀ = $\displaystyle 300$ (I₀ = Autonomous Investment)
Calculate the following on the basis of the given information :
(a)
Equilibrium Level of Income
(b)
Aggregate Demand at Equilibrium Level of Income
(c)
Marginal Propensity to Save
Marking-scheme solution
Given, C = $\displaystyle 200$ + 0.75Y; I₀ = $\displaystyle 300$
(a)
We know that;
At equilibrium level of income
Y = C + I
Y = ($\displaystyle 200$ + 0.75Y) + $\displaystyle 300$
0.25Y = $\displaystyle 500$
Y = $\displaystyle 2,000$
(b)
At the Equilibrium level of income
AD = Y
∴ AD = $\displaystyle 2,000$
(c)
MPS = $\displaystyle 1$ – MPC
MPS = $\displaystyle 1$ – $\displaystyle 0.75$ = $\displaystyle 0.25$
Practice Determination of Income and Employment →All Determination of Income and Employment questions
More from Determination of Income and Employment
- Identify which of the following equations is true. (Choose the correct alternative)2023 · asked 3×
- Suppose in an economy, planned spendings are greater than planned outputs. Identify the correct option with…2025 · asked 3×
- Read the following statements carefully: Statement 1: Marginal Propensity to Consume (MPC) exhibits the…2025 · asked 3×
- Read the following statements: Assertion and Reason (R). Choose the correct alternative from those given…2024 · asked 3×
- Marginal Propensity to Consume (MPC) exhibits the slope of function. (Choose the correct option to fill in…2025 · asked 3×
- Suppose in a hypothetical economy, Y = 50 + 0·8Y + 100, where Y = National Income. The value of Investment…2026 · asked 3×
- Read the following statements: Assertion and Reason (R). Choose the correct alternative from those given…2024 · asked 3×
- Discuss briefly, how the government can control the situation of deflation using the following: Taxation…2023 · asked 3×
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.