Suppose household consumption is C=100+0.90Y, where Y=income, and investment is 150. Find the equilibrium output and consumption.
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Expert's answer
2015-01-21T02:58:26-0500
Answer on Question #50382, Economics - Macroeconomics
Assignment
Suppose household consumption is C=100+0.90Y, whereY=income, and investment is 150. Find the equilibrium output and consumption.
Solution
We can write an equation Y = Equilibrium output = C + I Y = 100+0.90Y + 150 0.1Y = 250 Y = 2500 Now we can find consumption C= Consumption = 100+0.90Y C=100+0.90*2500 C = 2350
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