Macro

Income & Employment

Easy

$C = 120 + 0.5Y$

$I = 20$

What is the equilibrium income?

140

280

1400

140.5Y

✅ Correct Option: 2

Option 1 -> Incorrect. This is only part of the autonomous expenditure (C₀ + I = 120 + 20 = 140), not the equilibrium income.

Option 2 -> Correct. Using Y = C + I, we get Y = 120 + 0.5Y + 20, solving gives Y = 280.

Option 3 -> Incorrect. This value is too high and doesn't satisfy the equilibrium condition.

Option 4 -> Incorrect. This is an expression, not a numerical value for equilibrium income.

Hence, Option 2: 280 -> In equilibrium, Y = C + I. Substituting: Y = (120 + 0.5Y) + 20 → Y = 140 + 0.5Y → 0.5Y = 140 → Y = 280. The multiplier is 1/(1-MPC) = 1/(1-0.5) = 2, and autonomous expenditure is 140, so Y = 2 × 140 = 280 -> correct

2025: 3 June Shift 1

Due to weakening of global economic activity, level of aggregate demand ___________ in the economy.

2026: 13 May Shift 2

The ex-ante term refers to ?

2025: 15 May Shift 1

Given the equation of the consumption function as $C = \bar{C} + cY$ , what does $\bar{C}$ donate?

2025: 26 May Shift 2

Arrange the following in chronological order, starting from the earliest.

(A) Publishing of 'An inquiry into the Nature and Cause of the Wealth of Nations'.

(B) The Great Depression.

(D) Publishing of 'General Theory of Employment, Interest and Money'.

Choose the correct answer from the options given below:

2026: 13 May Shift 2

The ex -ante output of final goods can also be considered as ?

2026: 11 May Shift 2

For a hypothetical economy, C = 200+0.8Y (where c= consumption and Y= Income) and Autonomous Investment = 400 crore. Value of Investment multiplier (k) = _____.

C=120+0.5YC = 120 + 0.5YC=120+0.5Y I=20I = 20I=20 What is the equilibrium income?

Solution

Related questions:

Keyboard Shortcuts

CUET Economics Past Year Questions (Topic-Wise)

$C = 120 + 0.5Y$

$I = 20$

What is the equilibrium income?