Question

Find consumption expenditure from the following: 

National Income= Rs 5000/- 

Autonomous consumption= Rs 1000/- 

Marginal propensity to consume=0.80 

Answer 1

C = c^‒ + b.Y 

 = Rs 1000+ (0.8) x 5000 

= Rs 1000+ Rs 4000 

= Rs 5000/