Macroeconomics: Determination of Income and Employment · Class 12 · CBSE · Commerce Economics
The consumption function of an economy is C = ₹100 crore + 0.8Y. At what level of income will saving be zero?
Practice question from Macroeconomics: Determination of Income and Employment (Class 12 · CBSE · Commerce Economics), with the correct answer and a step-by-step solution.
easy · MCQ · Q-E8A66E
The consumption function of an economy is C = ₹100 crore + 0.8Y. At what level of income will saving be zero?
- A.₹100 crore
- B.₹400 crore
- C.₹500 croreCorrect answer
- D.₹800 crore
Solution
Saving is zero at the break-even level of income, where consumption equals income. Thus, , giving and crore.
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