Country Z has an economy that can be described as C= 200 + (0.8) y I= 150 G= 250 X= 115 M= 125 + (0.05) Y C= Consumption...
Country Z has an economy that can be described as
C= 200 + (0.8) y
I= 150
G= 250
X= 115
M= 125 + (0.05) Y
C= Consumption
Y= Income
I= investment
G= Goverment spending
X= exports
M=Imports
What is the equilibrium level of income for this economy?
1. 2360
2. 3930
3. 4,960
4. 8,260
Homework Answers
Answer
The equilibrium is at
Y=C+I+G+X-M
Y=200+0.8Y+150+250+115-(125+0.05Y)
Y=590+0.8Y-0.05Y
Y-0.75Y=590
0.25Y=590
Y=2360
The equilibrium is at $2360
Option 1
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