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Standard XII
Economics
Items Excluded in GDP
The consumpti...
Question
The consumption function of an economy is given as: C = 40 + 0.7 Y. Calculate the saving at the income level of Rs. 2,200 crores (Saving - 7620 acres)
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Solution
The consumption at income level of Rs. 2,200 crores ,
C = 40+ 0.7 * 2,200
= 40+ 1640= Rs. 1680 crores.
Savings= Income- consumption= 2,200- 1680= Rs. 520 crores.
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