An open economy is in equilibrium when Y = C + I + G + X - M where Y = national income; C = consumption; I = investment; G = government expenditure; X = exports; and M =imports. Determine the equilibrium level of income given that C = 0.8 Y+ 80; I = 70; G =130; X =100 , and M = 0.2Y + 50.

An open economy is in equilibrium when Y = C + I + G + X - M where Y = national income; C = consumption; I = investment; G = government expenditure; X = exports; and M =imports. Determine the equilibrium level of income given that C = 0.8 Y+ 80; I = 70; G =130; X =100 , and M = 0.2Y + 50.

ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

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Definition Definition Monetary value of all goods and services produced in an economy during a financial year. National income also refers to the total income earned by the factors of production during a financial year.

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