The saving function of an economy is given as :

S = (–) 10 + 0 �20 Y.

If the ex-ante investments are Rs. 240 crores, calculate the following :

(i) The equilibrium level of income in the economy.

(ii) Additional investments will be needed to double the

present level of equilibrium income.

Describe the adjustment mechanism, if in an economy, the planned savings are lesser than the planned investments.

Explain the following functions of the Central Bank :

(i) Lender of last resort

(ii) Banker to the Government

Explain the concepts of individual demand schedule and market demand

schedule.

The coefficient of price elasticity of demand is given as (–) 3. At a price of

Rs. 10, a consumer buys 100 units of the commodity. How many units of

the commodity will she buy if the price falls by 50 %?