CUET Economics PYQs

When autonomous investment increases, the aggregate demand curve shifts?

If there is an increase in investment by Rs100 in an economy, MPC = 0.9, choose the correct sequence with reference to the working of the investment multiplier.

(A) Producers increase their planned output further by (0.9)10, the income of the economy goes up by (0.9)10 and consumption demand increases further by (0.9)² 10.

(B) This process goes on, round after round.

(C) Income increases by 100, Consumption expenditure increases by 90 and therefore, aggregate demand goes up by 90.

(D) The total increment in the income will be 1000.

Choose the correct answer from the options given below:

If C= X+0.6Y & Investment is Rs 1,500 Equilibrium level of income in economy would be 4050, find out the autonomous consumption.