Page 4 - lesson note -Aggregate Demand and Related Concepts42
P. 4
=> = −40 + (1 − 0.6)
=> = −40 + 0.4
c. The break-even level of national income is determined at the point
where S=0. i.e. −40 + 0.4 = 0
=> 0.4 = 40
40
=> =
0.4
=> = 100
therefore, break-even level of national income is 100cr.
6. If APC of an economy is 0.8, what should be the savings when an income
level is Rs.4000crore?
Answer: -
Given APC = 0.8
=> = 1 − = 1 − 0.8 = 0.2
= = 0.2
=> = 0.2
4000
=> = 0.2 × 4000 = 800 .
