Question on: JAMB Economics - 2023
Calculate the equilibrium level of national income (Y) where Y = C + I + G; C = 100 + 0.75Y; I = 50; G = 200
A
2000
B
100
C
1500
D
1400
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Correct Option: D
To find the equilibrium level of national income (Y), you can substitute the given consumption (C), investment (I), and government spending (G) values into the equation Y = C + I + G.
Given:
\[ C = 100 + 0.75Y \]
\[ I = 50 \]
\[ G = 200 \]
Substitute these into the equilibrium equation:
\[ Y = C + I + G \]
\[ Y = (100 + 0.75Y) + 50 + 200 \]
Now, solve for Y:
\[ Y = 350 + 0.75Y \]
\[ 0.25Y = 350 \]
\[ Y = \frac{350}{0.25} \]
\[ Y = 1400 \]
Therefore, the equilibrium level of national income (Y) is 1400.
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