Thursday, October 17, 2024

Calculate equilibrium income



Given,
 Consumption function =600+0.7Y
Calculate equilibrium income when investment I=20





In equilibrium,
Y=C+I
Y=600+0.7Y+20
Y=620+0.7Y
Y-0.7Y=620
0.3Y=620
Y=620/0.3
Y=2066.67
Equilibrium income Y=2066.67

 

Labels: ,

0 Comments:

Post a Comment

Subscribe to Post Comments [Atom]

<< Home