Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Determination of Income and Employment

Question:

At the equilibrium point when $C=100+0.5 Y$ and $I= 200$, saving will be ........

Options:

600

400

200

100

Correct Answer:

200

Explanation:

The correct answer is Option (3) → 200

Given: Consumption functionC=100+0.5Y ,  Investment (I): 200

At equilibriumY=C+I

Step 1: Find Equilibrium Income (Y)

Substitute the consumption function into the equilibrium condition:

Y = 100+0.5Y + 200

Y - 0.5 Y = 300

Y = 300/0.5 = 600

Step 2: Find Consumption (C) 

C= 100 + 0.5 * 600 = 400

Step 3: Find Saving (S)

S = Y - C

    = 600 - 400

    = 200