Expert economic teachers explain Sandeep Garg Class 12 Macroeconomics Solutions Chapter 8: Income Determination and Multiplier from the new version of Sandeep Garg Macroeconomics Class 12 textbook solutions.
Sandeep Garg economics class 12 solutions are available at BYJU'S to provide students with a thorough understanding of the subject. These insights can be of tremendous value to students as they complete their homework and prepare for their board exams.
Sandeep Garg Solutions Class 12 – Chapter 8 – Part B
Question 1
Calculate multiplier if MPC is : (i) 0.75 (ii) 0.90
Solution:
Question 3
In an economy, income generated is four times the increase in investment expenditure. Calculate the values of MPC and MPS
Solution:
Question 4
In a two-sector economy, the saving function is given as S = – 10 + 0.2Y and investment function is expressed as I = – 3 + 0.1Y. Calculate the equilibrium level of income?
Solution:
Equilibrium level of income (Y) is attained when S= I.
It means that:
-10 + 0.2Y = – 3 + 0.1Y
0.2Y – 0.1Y = – 3 +10
0.1Y = 7
Y=70
Equilibrium level of income = 70
Question 5
What are the two approaches for determining the equilibrium level of income?
Solution:
The two approaches for determining the equilibrium level of income are as follows:
- AD (or C+ I) and AS approach: Equilibrium is achieved when planned expenditure of the economy (AD) is equal to the planned availability of goods and services (AS), i.e., when AD=AS
- Saving and Investment Approach: Equilibrium level of income is determined at the level where planned saving is equal to planned investment. I.e., when S=1
0 Comments