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In an economy, C= 100 + 0.7Y and investment is 500 crores. Find the equilibrium level of income.

Solution

✅ Correct Option: 3

At equilibrium Y=C+I=100+0.7Y+500Y = C + I = 100 + 0.7Y + 500. So 0.3Y=6000.3Y = 600, giving Y=2000Y = 2000 crores.

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