Using the ex-ante aggregate demand formula:
AD=A+MPC×Y
Since every extra rupee of income is either spent or saved, MPC+MPS=1
MPC=1−MPS
MPC=1−0.2=0.8
Substituting A=₹50 crores, MPC=0.8, and Y=₹4000 crores:
AD=50+0.8×4000
AD=50+3200
AD=₹3250 crores
Suppose autonomous investment and consumption expenditure (A) in a hypothetical economy is ₹50 crores. MPS is 0.2 and the level of income is ₹4000…
CUET UG 2025 — Economics Macro
2025mcqmedium
Suppose autonomous investment and consumption expenditure (A) in a hypothetical economy is ₹50 crores. MPS is 0.2 and the level of income is ₹4000 crores. The value of ex-ante aggregate demand would be _________
Official previous-year question
Held on 29 May 2025 · Verified 13 Jul 2026.
Options
- A
4000
- B
4200
- C
3250
- D
3300
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