Please help me with a m/c question (1 Viewer)

[Too right]

Hey
this was from the 2003 hsc paperm, and i just dont know how to get the answer

the answer is 700, but i have no idea how they got it


Q. What is the equilibrium level of income if C=100 + 0.8Y and I = 40


a) 100
b) 140
c) 500
d) 700

Thank you

 

[word.]

Q. What is the equilibrium level of income if C=100 + 0.8Y and I = 40


a) 100
b) 140
c) 500
d) 700


C = 100 + 0.8Y

Income = Consumption + Investment
Y = C + I
Y = (100 + 0.8Y) + 40
0.2Y = 140
Y = 700

 

[Too right]

wow that was quick

thanks alot for your help buddy