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Answer to Question #24339 in Macroeconomics for Sydney

Question #24339
How do I calculate equilibrium national income when given T? For example: C=150+0.9yD yD=.8y I=400 T=0.2y G=700 X=130 IM=0.08y
Expert's answer
The level of equilibrium national income Ye = C + I + G + (X - IM) ,
where C= Consumer spending, I = Investment (Gross fixed Capital
Formation), G= Government Spending, X= Exports and IM= Imports.
Disposable income ( Yd ) is calculated as the difference between personal
income (Y) and personal tax and non tax payments (T).
Y = C + I + G + (X - IM)
Yd= Y - T
Y=150+0.9(Y-T)+400+700+130-0.08Y
Y=150+0.72Y+400+700+130-0.08Y
0,36Y=1 380
Ye=3 833 (the level of equilibrium national income)

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