4) Consider the national income model
Y =C +I
C = aYd + 50
I = 24
1
Yd = Y T
T = 20
Show that the equilibrium level of national income is given by
Y = 741 20aa
Transpose this equation to express a in terms of Y . Hence, or otherwise, …find the value of a
for which Y = 155 and …find the value of C: