Question

In an economy, C = 300 + 0.5Y and I = ? 600/- (where C =consumption, Y =income or investment). Compute the equilibrium level of income

Options

• 1800

• 2000

• 3000

• 4000

Answer 1

1800

Explanation:

In an economy, C = 300 + 0.5Y and I = ? 600/- (where C = cons~ption, Y =income or investment). Compute the following:

The equilibrium level of income

I = 600/- and C = 300 + O.5Y

Y = C + I

Y = 300 + O.5Y + 600

Y = `900/0.5`

Income (Y) = ? . 1,800/-