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Question

From the following equation estimate consumption when disposal income Yd is Rs.1000.
C0=Rs. 200+0.80Yd

C1= consumption
Yd= disposable income

A
Rs. 1000
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B
Rs. 1100
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C
Rs. 900
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D
Rs. 800
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Solution

The correct option is A Rs. 1000
Given that Yd=1000

C=C0+C1Yd
C=200+0.81000
C=200+800
C=1000

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