Answer to Question #94529 in Economics for Daniel

Question

Let us assume that planned aggregate demand is given by: AD = C + I + G + NX, Let C = 610 + 0.8Y; I = 220; and G = 800; NX = 10 and T = 250. Calculate the equilibrium output.\n
a.3700
b.None of the above
c.4700
d.8700

Answer 1

In equilibrium AD = Y = C + I + G + NX,

610 + 0.8(Y - 250) + 220 + 800 + 10 = Y,

Y = 7200.

So, the correct answer is

b.None of the above.