Homework Answers
Ans.91. e. 3400
At the equilibrium, Y=AE
Y= Z= (C+I+G)
Y= C+I+G
Y= 300+0.5YD + 200 + 2000
Y= 300 +0.5 (Y-T) +200 + 2000
Y= 2500 + 0.5 ( Y - 1600)
Y= 2500 + 0.5Y - 800
Y - 0.5Y= 1,700
0.5 Y = 1,700
Y = $3400
Hence, the equilibrium level of output in this economy is $3400.
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