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Regardless Of The Level Of Income Sample Assignment

Suppose, consumption function is given as:
                                        C = -600 + 0.75Y

Investment is assumed to be 900, regardless of the level of income. Government purchases are 1,200. Determine the equilibrium level of income.

Solution:

 Equilibrium level of income is defined as:
                                        Y = C + I +G
Putting the values, we get
                                        Y = -600 +0.75Y + 900 + 1,200
                                        Y = 1,500 + 0.75Y
To solve this equation for Y, first subtract 0.75Y from both sided to get
                                 0.25 = 1,500
Then divide both side by 0.25 to obtain the answer
                                   Y = 6,000

                                 

Other Sample Assignments in Economics Homework Assignment :

Manufacturer Production Function	Price Elasticity Of Supply
Equalization Of Wages	Equilibrium Price Of Commodity
Poverty In India	Gross National Product
Consumption At Different Levels	Gross Domestic Product
Investment Decision	Expected Raturn
Level Of Income	Saving Equation
Equilibrium Level of Income	Equilibrium Level of National
Equilibrium GDP	Equilibrium level of GDP
Autonomous Investment	Calculate The Equilibrium GDP
Government Expenditure	Equilibrium Gdp Of Economy
Hypothetical Information	Equilibrium GDP Government
Equilibrium Level Of Inceome	Equation For Monetary Equilibrium
Calculate Saving Function	Equilibrim Level Of Income
Regardless Of The Level Of Income

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