Calculate the equilibrium level of national income (Y) wh...
Calculate the equilibrium level of national income (Y) where Y = C + I + G; C = 100 + 0.75Y; I = 50; G = 200
2000
100
1500
1400
Correct answer is D
y = a+i+G1−b
where b = 0.75
= 100+50+2001−075
= 3500.25
= 1400
Alternatively:
Y = C + I + G
Y = 100 + 0.75Y + 50 + 200
Y - 0.75Y = 350
Y( 1 - 0.75) = 350
= 3500.25
Y = 1400
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