Answer: Option D. -> (i) 14,100 (ii) 7,100                         
:
D
(i) Given, S = - 50 + 0.5Y
and I = 7,000
At the equilibrium level,
$\Rightarrow$ S = I
-50 + 0.5Y = 7,000
0.5Y = 7,000 + 50
0.5Y = 7,050
$Y=\frac{7,050}{0.5}$
$\Rightarrow$ Y = 14,100
(ii) At Y = 14,100
Saving, S = - 50 + 0.5(14,100)
= - 50 + 7,050
$\therefore$ S = 7,000
Consumption expenditure, C = Y - S
$\Rightarrow$ $=14,100-7,000$
$=7,100$
Alternative Method
At equilibrium level,
Saving = Investment
Saving = 7,000
Consumption expenditure, C = Y - S
= 14,100 - 7,000
= 7,100.
(i) Equilibrium level of national income = 14,100.
(ii) Consumption expenditure at equilibrium level of national income = 7,100.

Answer: Option B. -> False
:
B
False. MPC + MPS = 1, it can never be greater than or less than 1.

Answer: Option B. -> (i) Rs 5,375 (ii) Rs 3,375 (iii) Rs 2,000
:
B
(i) Given, C = 150 + 0.6Y and I = 2,000
At the equilibrium level,
Y = C + I
$\Rightarrow$ Y = 150 + 0.6Y + 2,000 $\Rightarrow$ Y = 2,150 + 0.6Y
Y - 0.6Y = 2,150 $\Rightarrow$ 0.4Y = 2,150
$Y=\frac{2,150}{0.4}=5,375$
(ii) Consumption, C = 150 +0.6(5,375)
= 150 + 3,225 = 3,375
(iii) We know that, Y = C + S
$\Rightarrow$ S = Y - C = 5,375 - 3,375 = 2,000
Alternatively,
Given : C = 150 + 0.6Y,
S = -150 + 0.4Y ($\because$ MPC = 0.6, accordingly MPS = 1 - 0.6 = 0.4)
Or, S= -150 + 0.4(5,375)
= -150 + 2,150 = 2,000.
(i) Equilibrium level of national income = Rs 5,375.
(ii) Consumption expenditure at equilibrium level of national income = Rs 3,375.
(iii) Saving at equilibrium level of national income = Rs 2,000.

Answer: Option A. -> Rs 60
:
A
MPS = $\frac{\Delta S}{\Delta Y}$
$\Delta S$ = MPS *$\Delta Y$
= 0.6 * 100
= Rs. 60

Answer: Option B. -> 1
:
B
Multiplier = $\frac{1}{1-MPC}$
= 1.

Answer: Option B. -> -300
:
B
C + S = Y
At zero income level,
C = -S
When Y = 0, C = 300 + 0.8(0) = 300
Therefore, S = -300

Answer: Option A. -> Increase
:
A
If MPC increases, the value of multiplier will increase.

Answer: Option C. -> 2
:
C
If MPC = MPS, then, MPC = MPS = 0.5.
Multiplier = $\frac{1}{1-0.5}$
= 2

Answer: Option A. -> Increases
:
A
On account of an injection of aggregate demand, the equilibrium level of income increases.

Answer: Option A. -> Rs 25,000
:
A
Change in savings $=50,000\times \frac{1}{2}=25,000$
We know, $MPS=\frac{\Delta S}{\Delta Y}=\frac{25,000}{50,000}=0.5$
We know,
Multiplier $\left(M\right)=\frac{1}{1-MPC}=\frac{1}{MPS}$
Or, $M=\frac{\Delta Y}{\Delta I}$
Now, MPS = 0.5, we get $\Delta I=\frac{\Delta Y}{M}$
$=\frac{50,000}{2}=25,000$ $[M=\frac{1}{MPS}=\frac{1}{0.5}=2]$
Increase in GDP by Rs 50,000 is caused by increase in investment of Rs 25,000.