Question

Give that S = - 25 + 0.5Y and I = 5,000, equilibrium Y is and equilibrium C is .

• A. 5,050
• B. 10,050
• C. 5,000
• D. 10,000

Answer 1

Answer: (A), (B)

The correct options are
A 5,050
B 10,050

In equilibrium, S = I
So that, -25 + 0.5Y = 5,000
0.5Y = 5,025
Y = 10,050

S at equilibrium: S = - 25 + 0.5(10,050)
S = - 25 + 5,025 = 5,000

Y = C + S
Or, C = Y - S

Thus, equilibrium C = 10,050 - 5,000
= 5,050