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Re:vasudha isi 2012 ME II

Posted by ritu on Mar 08, 2012; 5:29pm
URL: http://discussion-forum.276.s1.nabble.com/isi-2012-ME-II-tp7354815p7355657.html

 16th question..since Ct=0.5 Yt-1 ...this means that saving function is S=Yt-Ct

ie...S=Yt-0.5Yt-1
given that Y0=100,C0==S0=I0=50

time period 1:
this means that C1=0.5*100=50
since loan is taken up for investment in this year Invstmt in year 1=50+100=150
now Y1=C1+I1=50+150=200
savings    S1=200-0.5*100=150+50=200(previous year's saving of 50 is also added)

time period 2:
C2=0.5 * 200=100
I2=50(no loan this time)
Y2=C2+I2=150
S2=150-0.5*200=50
total Saving for year 2=100+50=150(loan of 100 is deducted from total saving in beginning of year so only 100 is carried forward from previous year)...


i couldnt find equilibrium values....@amit goyal sir and vasudha......do tell me if this is right or wrong approach??