Given C * SOO* 0_75 Yd

Economics Apr 01, 2021

Given C * SOO* 0_75 Yd. Investment Q 100. Government Purchases = 200, and Taxes = 150. find the equilibrium output 0 7200 O 3100 O 2500 O 2750 O 3900 0 9100 O 3350 O3450 O 6700 O 3650 O 6200

Expert Solution

Given,

C = 500 + 0.75Y???d

I = 100, G = 200 and T = 150

Where Y??????d is the disposable income which is calculated by (Y-T).

At equilibrium:

Y = C + I + G

Y = 500 + (0.75)(Y-150) + 100 + 200

Y = 800 + 0.75Y - 112.50

0.25Y = 687.50

Y = 2,750

So, the equilibrium Y* is 2,750.

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