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In an Economy, AD = Rs.250 cr+0.6Y and at zero level of income consumption is Rs.150 crores The value of autonomous investment will be:

Solution

Correct Option: 1

AD=C+IAD = C + I. At Y=0Y = 0, C=150C = 150. The autonomous part of AD is 250=C0+I250 = C_0 + I. So I=250150=I = 250 - 150 = Rs. 100 crores.

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