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?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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