Question:medium

In a two sector model, let \(C=60+0.80Y\), \(I=116-2i\), \(L=0.20Y-5i\) and \(M=120\). The LM equation will be

Show Hint

For LM equation, use money market equilibrium \(L=M\), then solve the equation for interest rate \(i\).

Updated On: May 22, 2026

\(i=0.04Y-24\)
\(i=0.10Y+88\)
\(i=0.04Y+24\)
\(i=0.10Y-88\)

Show Solution

The Correct Option is A

Solution and Explanation

Was this answer helpful?

0

Top Questions on Income and Output Determination

Under the Keynesian theory, ‘Reference Line’ is a straight line passing through the origin drawn at an angle of _______.
(Choose the correct option to fill in the blank)
- CBSE Class XII - 2025
- Economics
- Income and Output Determination
View Solution
Read the following statements carefully:
Statement 1: Marginal Propensity to Consume (MPC) refers to the consumption per unit of income.
Statement 2:As the income increases, the proportionate increase in the level of consumption is always more than the increase in the level of income.
In the light of the given statements, choose the correct option from the following:
- CBSE Class XII - 2025
- Economics
- Income and Output Determination
View Solution
In a two-sector economy, the Aggregate Demand can be determined by adding ............ and ...............
- CBSE Class XII - 2025
- Economics
- Income and Output Determination
View Solution
Assuming for a hypothetical economy:
[(i)] Autonomous Consumption Expenditure ($\bar{C}$) = ₹ 250 crore
[(ii)] Marginal Propensity to Save (MPS) = 0.2
[(iii)] Autonomous Investments ($I_0$) = ₹ 200 crore Estimate the Break-even level of Income and Equilibrium level of Income, on the basis of information given above.
- CBSE Class XII - 2025
- Economics
- Income and Output Determination
View Solution
Want to practice more? Try solving extra ecology questions todayView All Questions

Questions Asked in CUET (PG) exam

A trade-off is:

CUET (PG) - 2024
Trade-offs

If a Production Function is given as Q(x,y) = Axay, where (a + b) = 2, the function is said to display:

CUET (PG) - 2024
Production Theory

In an oligopolistic market, firm i and firm j have constant marginal cost = c for an identical good. They compete to set prices Pi and Pj. The demand for total market demand Q, where if \(P_i > P_j\), the demand for firm i is 0. If \(P_i < P_j\), the demand for firm i is Q. If \(P_₁ = P_j\), then they share the market equally and hence the demand for firm i is \(\frac{Q}{2}\). In equilibrium, the prices of firms i and j are:

CUET (PG) - 2024
Oligopoly

If Y = F(L,K) is a linear homogeneous production function, then multiplying all inputs by a constant factor α = 2 results in output increasing by a factor of:

CUET (PG) - 2024
Production Function

In the table below, firm 1 and firm 2 can cooperate to share market profits or compete with each other. The figures in the cells represent the profits in crores of INR. They can either cooperate with each other where they share INR 10 crores equally. Alternatively, they can compete, which lowers the market output to INR 4 crores, which they share equally. If one of the firms competes while the other cooperates, the former obtains INR 10 crore of profit while the other makes zero profit. In equilibrium, firm A and firm B should respectively:

Firm 2	Cooperate	Compete
Firm 1	5, 5	0, 10
Compete	10,0	2, 2

CUET (PG) - 2024
Game theory