Question

Which equation is the equilibrium condition when consumption contains Autonomous Consumption and induced consumption?

विकल्प

• \[Y=\overline{C}+\overline{I}+cY\]

• \[Y_d=Y-T\]

• \[Y=\overline{C}+\overline{I}-cY\]

• \[Y=\overline{C}+\overline{I}+G+c(Y-T)\]

Answer 1

The equilibrium condition is \[Y=\overline{C}+\overline{I}+cY\]. It equates planned (Ex-ante) Output with planned aggregate demand in the two-sector model.