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    Question

    If, C = 250 + 0.5 (Y-T) , I = 250-500i, i=0.1 and G=T=

    300. What will be the equilibrium level of income?
    A 1000 Correct Answer Incorrect Answer
    B 1200 Correct Answer Incorrect Answer
    C 1300 Correct Answer Incorrect Answer
    D 1400 Correct Answer Incorrect Answer
    E 1500 Correct Answer Incorrect Answer

    Solution

    Y = 250 + 0.5(Y-300) + 250 – 500 (0.1) + 300 Y = 250 + 0.5Y – 150 + 250 – 50 + 300 Y – 0.5 Y = 600 0.5Y = 600 Y = 1200

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