QuestionJuly 19, 2025

In the simple, two -sector model, if C= 200billion+.75(Y) and I= 30 billion, then equilibrium income (Y) is equal to: 150 billion. 480 billion. 600 billion. 920 billion.

In the simple, two -sector model, if C= 200billion+.75(Y) and I= 30 billion, then equilibrium income (Y) is equal to: 150 billion. 480 billion. 600 billion. 920 billion.
In the simple, two -sector model, if C= 200billion+.75(Y) and I= 30 billion, then equilibrium income (Y) is equal to:
 150 billion.
 480 billion.
 600 billion.
 920 billion.

Solution
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Answer

\ 920 billion Explanation 1. Set up the equilibrium condition In a two-sector model, equilibrium is when total output (Y) equals total spending. The formula is Y = C + I. 2. Substitute given values into the equation Given C = 200 + 0.75Y and I = 30, substitute these into the equilibrium condition: Y = 200 + 0.75Y + 30. 3. Solve for Y Rearrange to isolate Y: Y - 0.75Y = 230. Simplify to 0.25Y = 230. 4. Calculate Y Divide both sides by 0.25: Y = \frac{230}{0.25} = 920.

Explanation

1. Set up the equilibrium condition<br /> In a two-sector model, equilibrium is when total output (Y) equals total spending. The formula is $Y = C + I$.<br /><br />2. Substitute given values into the equation<br /> Given $C = 200 + 0.75Y$ and $I = 30$, substitute these into the equilibrium condition: $Y = 200 + 0.75Y + 30$.<br /><br />3. Solve for Y<br /> Rearrange to isolate Y: $Y - 0.75Y = 230$. Simplify to $0.25Y = 230$.<br /><br />4. Calculate Y<br /> Divide both sides by 0.25: $Y = \frac{230}{0.25} = 920$.
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