English

Suppose C = 100 + 0.75Y D, I= 500, G = 750, taxes are 20 per cent of income, X = 150, M = 100 + 0.2Y. Calculate equilibrium income. -

Advertisements
Advertisements

Question

Suppose C = 100 + 0.75Y D, I= 500, G = 750, taxes are 20 per cent of income, X = 150, M = 100 + 0.2Y. Calculate equilibrium income.

Options

  • 2333

  • 4333

  • 1333

  • None of the above

MCQ

Solution

2333

Explanation:

C = 100 + 0.75YD

I = 500

G = 750

X = 150

M = 100 + 0.2Y

Equilibrium income (Y) = C + c(Y − T) + I + G + X − M − mY

Or, Y = 100 + 0.75 `("Y" - 20/100 "Y") + 500 + 750 + 150 - 100 - 0.2"Y"`

Or, Y = `1400 + 75/100 xx (4"Y")/5 - 0.2"Y"`

Or, Y = `1400 + 3/5 "Y" - 0.2"Y"`

Or, `(6"Y")/10`

= 1400

Y  = `(1400 xx10)/6`

= `7000/3`

= 2333

shaalaa.com
  Is there an error in this question or solution?
Share
Notifications

Englishहिंदीमराठी


      Forgot password?
Use app×