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10 December, 05:53

If the consumption function is C = 100 + 0.75Y and planned investment spending is 500 , what will be the equilibrium level of output? Ye = $ nothing. (Enter your response as an integer.)

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  1. 10 December, 05:57
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    The equilibrium level of output will be Y=2200

    Explanation:

    Comnsider the following formulas to solve the exercise.

    1. Using the Expenditure approach to GDP,

    Y=C+I+G

    Y=200 + 0.75 (Y-200) + 200+300

    Y=700+0.75Y-150

    0.25Y=550

    The equilibrium level of output will be Y=2200
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Home » Business » If the consumption function is C = 100 + 0.75Y and planned investment spending is 500 , what will be the equilibrium level of output? Ye = $ nothing. (Enter your response as an integer.)
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