Question

Find the equation for the equilibrium level of income in the reduced form

Answer 1

Hey mate!

I am here with your answer!

Most simply, the formula for the equilibrium level of income is when aggregate supply (AS) is equal to aggregate demand (AD), where AS = AD. Adding a little complexity, the formula becomes Y = C + I + G, where Y is aggregate income, C is consumption, I is investment expenditure, and G is government expenditure.

Hope this will help you!

Answer 2

The equilibrium level of the incomes denotes that the point where the market demand and the production stand same.

Means it is the point in which the company can sell all of its goods in the market which are produced and they are planned to sell.

The simplified or reduced formula of the equilibrium income is very simple and that is Y = C + I + G.