Bharti Singla
Senior Member
In a closed economy with no government sector, the marginal propensity to save is 0.1, investment is £500 million, and autonomous consumption is £200 million. Which of the following statements is TRUE at the equilibrium level of national income?
A. Planned savings are £300 million.
B. The marginal propensity to consume is higher than the average propensity to consume.
C. Consumption expenditure is equal to £6,500 million.
D. The gross domestic product is £6,800 million
The correct answer is C.
Can anyone please explain the calculation?
A. Planned savings are £300 million.
B. The marginal propensity to consume is higher than the average propensity to consume.
C. Consumption expenditure is equal to £6,500 million.
D. The gross domestic product is £6,800 million
The correct answer is C.
Can anyone please explain the calculation?