Question

find equilibrium income given consumption function C=50+0.8Y
Autonomous Investment I = 100
M = 20+25Y
X= 250
Government Expenditure =200
T= 0.3Y​

Answer 1

Answer:

a) In an equilibrium, savings is equal to investment

S = (–) 10 + 0 �20 Y.

240 = -10 +0.20Y

240+10 = 0.20Y

250=0.20Y

Y= 250/0.20 = 1250