Explain briefly?? soon

Solution

False

Justification
Investment = Rs 360
MPS + MPC = 1
0.3 + MPC = 1
MPC = 1 - 0.3
MPC = 0.7
C = a + by

a is autonomous consumption, b is MPC and Y is income

C = 40 + (0.7)(1400)
C = 40 + 980
C = 1020
So

Y = C + I

1400 = Y

1020 + 360 = C + I

1380 = C + I

Hence, Y is not equal to C + I