- The equilibrium level of income.
Y=C+I+G+X−M
C=100+0.5Yd
=100+0.5(Y−T)
=100+0.5(Y−0.03Y)
Y=100+0.5(Y−0.03Y)+200+150+120−0.03Y
Y=100+0.5Y−0.015Y)+200+150+120−0.03Y
Y=570+0.455Y
Y−0.455Y=570
0.545Y=570
Y=1,045.87
2). The next exports.
The value of exports(X)−value of imports(M)
X−M
=120−(0.03×1,045.87)
=120−33.38
=88.62
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