MHB Possible title: Solving for Equilibrium National Income in a Simple Model

[smileylou]

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:

 

[Sudharaka]

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:

Hi smileylou,

Your equations aren't very clear to me. Are they,

\[Y=C+I\]

\[C= aY_d+50\]

\[I = 24\]

\[Y_d = 20Y\]

Also could you define each symbol? For example what symbol represent the national income?