(Advanced analysis) The given equations describe consumption and investment (in billions of dollars) for a private closed economy.
C = 60 + 0.6Y
I = I0 = 30
In this economy, the equilibrium level of income (Y) is
A) 360.
B) 225.
C) 200.
D) 135.

Question

Quizplus · Accepted Answer

To find the equilibrium level of income (Y), we need to set total output (Y) equal to total expenditures (C + I). 
Substituting the given values of C and I, we have: 
Y = C + I 
Y = (60 + 0.6Y) + 30 
Y = 90 + 0.6Y 
0.4Y = 90 
Y = 225

Therefore, the equilibrium level of income in this economy is 225 billion dollars.

(Advanced Analysis) the Given Equations Describe Consumption and Investment (In