Given the consumption function C = 100 + 0.75Y, where C is consumption and Y is income. At equilibrium, income (Y) equals consumption (C) plus investment (I), so:
Y = C + I
With Y = 800 crores and substituting the consumption function:
800 = 100 + 0.75(800) + I
Calculating 0.75 multiplied by 800:
0.75 × 800 = 600
Substituting this back into the equation:
800 = 100 + 600 + I
Simplifying the equation:
800 = 700 + I
Solving for I by subtracting 700 from both sides:
I = 800 - 700
I = 100
The investment in this economy is 100 crores.
List-I | List-II | ||
| A | Great Leap Forward | (I) | Protecting the future generation |
| B | Mao Zedong | (II) | Aimed at industrialising the country on a massive scale |
| C | Brundtland Commission | (III) | Introduced the Great Proletarian Cultural Revolution |
| D | Our Common Future | (IV) | Seminal Report that explained sustainable development as meeting the basic needs of all for a better life |