Question

Suppose an economy is depicted by the expenditure function provided​ below: C​ + G​ + I​ + X​ = ​$300 ​+ 0.80timesY ​+ ​$350 ​+ ​$275 ​+ ​$75 All figures are in billions of dollars. Assume there are no taxes in this nation so disposable income Yd​ = Y. The economy reaches an equilibrium at ​$ nothing billion. ​(Enter your answer as a whole​ number)

Answer 1

Answer:

$5,000  billion

Explanation:

The computation of the equilibrium at ​economy reaches is

We know that

Y = C​ + G​ + I​ + X​

where

Y = GDP

C = Consumption

G = Government spending

I = Investment

X = Net exports

Now placing the values

Y = $300 ​+ 0.80Y ​+ ​$350 ​+ ​$275 ​+ ​$75

Y - 0.80Y = $1,000

0.20Y = $1,000

So, the Y equal to

= $1,000 ÷ 0.20

= $5,000 billion