HSC multiple choice eco question. (1 Viewer)

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magik22

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What is the equilibrium level of income if C=100+0.8Y and I = 40

a)100
b)140
c)500
d)700

The answer is d) 700

Can someone please explain why? I really don't understand it at all. When I saw this I fought C+I+G+(X-M) - GDP equation. But I don't understand why its 700. I tried working backgrounds and when i substituted in 700 into 'Y' ...

C=100+0.8(700)
C=660

Then I thought add I=40 to 660....it equaled 700...iuno some sort of connection there?

I just don't understand.
 
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mathslover

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magik22 said:
What is the equilibrium level of income if C=100+0.8Y and I = 40

a)100
b)140
c)500
d)700

The answer is d) 700

Can someone please explain why? I really don't understand it at all. When I saw this I fought C+I+G+(X-M) - GDP equation. But I don't understand why its 700. I tried working backgrounds and when i substituted in 700 into 'Y' ...

C=100+0.8(700)
C=660

Then I thought add I=40 to 660....it equaled 700...iuno some sort of connection there?

I just don't understand.
Click to expand...
Same here this is the MCQ in the 03 paper i dont know how to do..
someone please explain it to us?
 
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