| Autonomous consumption | Rs. 100 |
| Marginal Propensity to consume | Rs. 0.80 |
| Investment | Rs. 50 |
Computation of national income:
C= Rs 100
MPC = .80
I = Rs 50
At Equilibrium,
Y=C+I
or, Y = C+By+I
Substituting the values,
Y= 100+0.8Y+50
Or 2.Y=150
Or Y= Rs 750
National income =Rs 750.
Calculate Gross Value Added at Factor Cost:
| (i) | Units of output sold (units) | 1000 |
| (ii) | Price per unit of output | 30 |
| (iii) | Depreciation(Rs.) | 1000 |
| (iv) | Intermediate cost (Rs.) | 12000 |
| (v) | Closing stock (Rs.) |
Outline the steps taken in deriving saving curve from the consumption curve. Use diagram.
Distinguish between Revenue Expenditure and Capital Expenditure in a government budget. Give examples.
