Solution of question no. 87

Dear Student
i) Equilibrium level of income is when S=I
Given, S = -250 + 0.25Y
I = 2000
This implies , 2000 = -250 + 0.25Y
2250 = 0.25Y
Y = 9000 Crores

ii) AD = C + I
AD = 250 + 0.25Y + 2000 
AD = 2250 + 0.25(5000)
AD = 3500 crores


Regards
AD = 5000 Crores