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Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Determination of Income and Employment

Question:

Calculate ex ante aggregate demand when
autonomous investment is ₹100 crore, 
autonomous consumption is ₹100 crore, 
MPS is 0.4 and 
income level is ₹4,000 crore.

Options:

₹2400

₹2500

₹2600

₹2650

Correct Answer:

₹2600

Explanation:

AD = C + I 
AD = (c+bY) + I 
AD = (100 + 0.6*4000) + 100 
AD = 2400 + 100 + 100 
AD = ₹2600

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