In an economy, the consumption function is C=400+0 75 Y, where C is consumption expenditure and Y is national income - Economics - Introduction

Question

In an economy, the consumption function is C=400+0 75 Y, where C
is consumption expenditure and Y is national income and investment
expenditure is 2000 Calculate the equlibrium level of national
income and consumption expenditure Please help me

Utkarsh Bhargav · Accepted Answer

its simple
we have to find out Y and C
We know that Y=C+S and S=I (at equilibrium)
Y= 400+ 75Y +2000 , 0 25Y=2400 , therefore Y= 9600
Y=C+S , 9600=C + 2000 , therefore C= 7600
thats all

In an economy, the consumption function is C=400+0.75 Y, where C is consumption expenditure and Y is national income and investment expenditure is 2000. Calculate the equlibrium level of national income and consumption expenditure.Please help me