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helpppp (1 Viewer)

piyo_extreme

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plz helpp i dunno how to do this question, it's from hsc paper 2003

what is equilibrium level of income if C = 100 + 0.8Y and l = 40

A. 100

B. 140

C. 500

D. 700
 

d_a_n_z

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piyo_extreme said:
plz helpp i dunno how to do this question, it's from hsc paper 2003

what is equilibrium level of income if C = 100 + 0.8Y and l = 40

A. 100

B. 140

C. 500

D. 700
the answer is D...because Y=C+I
therefore Y= 100+.8Y+40
therefore Y-.8Y =140
therfoere .2Y =140
threfore Y=5X 140
=700
 

always_smile

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d_a_n_z said:
the answer is D...because Y=C+I
therefore Y= 100+.8Y+40
therefore Y-.8Y =140
therfoere .2Y =140
threfore Y=5X 140
=700
I know this is going to sound stupid but where did you get the eguation Y=C+I. I thought that Y=C+S+T. I am not good at maths. so could you please explain to be the concept Y= C+I.
 

d_a_n_z

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its not maths...(well that equation) its just in the textbook - doesnt matter if you dont nderstand it, as long as you know y=C+i??
 

Jago

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the full equation is Y = C + I + G + X - M
 

word.

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d_a_n_z said:
its not maths...(well that equation) its just in the textbook - doesnt matter if you dont nderstand it, as long as you know y=C+i??
Tim Riley said:
(1) Y = E = O

Income(Y) consists of consumption (C) plus savings (S) as in equation (2):

(2) Y = C + S

Expenditure consists of consumption (C) by households and investments (I) by firms as in equation (3):

(3) E = C + I

now Y = E so Y = C + I
1234567890
 

Jago

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Oh, that would make more sense.
 

always_smile

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d_a_n_z said:
its not maths...(well that equation) its just in the textbook - doesnt matter if you dont nderstand it, as long as you know y=C+i??
i cannot find Y=C+I anywhere in my textbook and we did not cover it last year. Thanks for the help/
 

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