Question

Consider an economy described by the following equations: C = 100 + 0.6 ∗ (Y −

  • T (consumption function) I = 200 − 1000 ∗ r (investment function) G = T = 100 (government purchase and tax) where Y is the national income and r is the interest rate. Assume r = 10%, What is the equilibrium income?
A 300
B 400
C 500
D 600
E 700
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