help in homework

New User?

Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / The information below relates to a closed economy without a government: Autonomous consumption = R285 million

The information below relates to a closed economy without a government: Autonomous consumption = R285 million

Business

The information below relates to a closed economy without a government:

Autonomous consumption = R285 million.

Autonomous investment = R300 million.

Marginal propensity to consume = 0.4.

Calculate the equilibrium level of income.

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

The equilibrium level of income is R976.95 million.

Explanation:

  • Equilibrium level of income = 1 / (1 - Marginal propensity to consume) * (Autonomous consumption + Autonomous investment)
  • Equilibrium level of income = 1 / (1 - 0.4) * (R285 million + R300 million)
  • Equilibrium level of income = R976.95 million

Sitejabber (5.0)

BBC (5.0)

Trustpilot (4.9)

Google (5.0)