jnu

[neha 1]

Consider an economy whose trade is balanced in which consumption expenditure C, which is a function of current disposable income (Yd), is estimated at 900 when disposable income is 1000. The marginal propensity to save in the economy is estimated at 20 percent and the government's tax revenues at 25 percent of gdp. If investment expenditure in that economy is 650 and the government is committed to balancing it's budget, then the equilibrium level of income would be
A. 4250
B.5000
C.5750
D.6250

[ABHI1994]

option b is correct

On 10 May 2015 at 23:23, neha 1 [via Discussion forum] <[hidden email]> wrote:

Consider an economy whose trade is balanced in which consumption expenditure C, which is a function of current disposable income (Yd), is estimated at 900 when disposable income is 1000. The marginal propensity to save in the economy is estimated at 20 percent and the government's tax revenues at 25 percent of gdp. If investment expenditure in that economy is 650 and the government is committed to balancing it's budget, then the equilibrium level of income would be
A. 4250
B.5000
C.5750
D.6250

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[tanudas]

How did you solve it ?