We know that

If We calculate National Income by Expenditure format

National income = Consumption Expenditure + Investment Expenditure

National income = C + I

Now, we can calculate C by using Consumption function formula

it is represented by

C =Ĉ +b(Y)

where

C= Total Consumption

Ĉ = Autonomous Consumption

Y=Income

b=MPC

Now, we can calculate National income as follows

National income=C+I

National income=Ĉ +b(Y) +I

### Example 31

Find national income from the following:

Autonomous Consumption = Rs 100

Marginal propensity to consume = 0.8

Investment = Rs 50

View AnswerC =Ĉ +b(Y)

C = 100 + 0.8Y

Now

Y = C + I

Y = 100 + 0.8Y + 50

0.2Y = 150

Y = 750

### NCERT Questions

**
No questions in this part
**

### Other Books

#### Question 1

**
An economy is in equilibrium.
**

**
Calculate National Income from the following:
**

**
Ĉ = Autonomous Consumption = 100
**

**
MPS = 0.2
**

**
Investment = 200
**

At equilibrium

S = I = 200

S = -Ĉ + MPS(Y)

200 = -100 + 0.2Y

300/0.2 = Y

1500 = Y

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