Chapter 4 Part 2 - Income Determination and Multiplier

Economics Class 12
Macroeconomics

### Example 24.

Given consumption function C= 100 + 0.75Y (where C=consumption expenditure and Y = national income)

and investment expenditure ₹ 1,000, calculate: C = consumption expenditure level

national income;(ii)Consumption expenditure at equilibrium level of national income .

### Example 25.

In an economy, the consumption function is C = 500 + 0.75Y, where C is

consumption expenditure and Y is income. Calculate the equilibrium level of income and

consumption expenditure, when investment expenditure is 5,000.

### Example 29.

In an economy, the investment expenditure is ₹ 70 crores and consumption function

is C=60 + 0.80Y. (i) Determine the equilibrium level of income; (ii) Find the equilibrium income

"when planned investment expenditure is increased by ₹ 10 crores; (iii) Value of multiplier due" to increase in investment expenditure.

### Example 34

calculate the value of Marginal Propensity to Consume (MPC), if in an economy, autonomous

consumption is RS 500 crores, ex-ante investment are RS 4,000 crores and equilibrium

level of Income of the economy is RS 18,00 crores.

### NCERT Questions

No questions in this part

### Other Books

#### Question 1

In an economy, the consumption function is C=600 + 0.9Y, where C is consumption expenditure and Y is income.

Calculate equilibrium level of income and consumption expenditure, when investment expenditure is 500.