2003 HSC question (1 Viewer)

[weirdguy99]

Hey, I need help with this multiple choice question.

What is the equilibrium level of income if C = 100 + 0.8Y and I = 40?
(A) 100
(B) 140
(C) 500
(D) 700

I know that equilibrium occurs when Y=AD, C+S+T=C+I+G+(X-M) which turns into
S+T+M=I+G+X but I have no idea how to sub them into the equation to make it give me a straight answer.

If someone could show me some working that would be great

Thanks.

 

[random-1006]

Hey, I need help with this multiple choice question.

What is the equilibrium level of income if C = 100 + 0.8Y and I = 40?
(A) 100
(B) 140
(C) 500
(D) 700

I know that equilibrium occurs when Y=AD, C+S+T=C+I+G+(X-M) which turns into
S+T+M=I+G+X but I have no idea how to sub them into the equation to make it give me a straight answer.

If someone could show me some working that would be great

Thanks.

For equilibrium doesnt C=Y ?

y= 100 +0.8y etc

im not 100% sure as i havent done eco in quite some time

 

[Deathless]

Hey, I need help with this multiple choice question.

What is the equilibrium level of income if C = 100 + 0.8Y and I = 40?
(A) 100
(B) 140
(C) 500
(D) 700

I know that equilibrium occurs when Y=AD, C+S+T=C+I+G+(X-M) which turns into
S+T+M=I+G+X but I have no idea how to sub them into the equation to make it give me a straight answer.

If someone could show me some working that would be great

Thanks.

Equilibrium occurs when:
Y = AD
Y=C+I
Y=100 + 0.8Y +40
0.2Y=140
Y= 700