Answer to Question #63342 in Macroeconomics for dennis

Question

Given a hypothetical consumption function of the form:
Y = C + I0 + G0
C = α + β
Where: = Y – T
Y = Income
T = Taxes and that:
Compute the equilibrium level of income and consumption

Answer 1

The equilibrium level of income and consumption is described with the formula: C + I0 + G0=α + β