Question

Calculate the values of equilibrium level of income (Y), disposable income (Yd), Consumption (C) and multiplier for the given information about an economy:C=550+0.6Yd, I=1700, G=2350, t=0.10Y​

Answer 1

Answer:

C= 550+0.6y

I=1700

can you please describe G

Answer 2

Equilibrium level of income (Y)

Given

Consumption ,multiplier,disposable income

To Find

Value of equilibrium of income

Solution

Y=C+I+G

Y=550+0.6Y + 1700 + 2350

Y= 4000 + 0.6Y

Y- 0.6Y = 4000

0.4Y = 4000

Y= 4000/0.4

Y= 10000

t=0.10Y

t=0.10 × 10000

t=1000

Note:

• Disposable income

Income which is left after all the reduction in taxes and charges.

• Equilibrium level of income

When economy have the same amount of production and demand.

• Consumption

Using all the provided resources.

• Multiplier

Figure out all the changes in variables.