Answer to Question #56353 in Macroeconomics for Abdinaafac

Question #56353
Given a hypothetical economic model of the form: Y = C + I0 + G0 C = α + β Where: = Y – T Y = Income T = Taxes and that: Compute the equilibrium level of income and consumption
1
Expert's answer
2016-01-19T08:28:40-0500
If Y = C + I0 + G0, C = α + β(Y - T),
then the equilibrium level of income will be Y = α + β(Y - T) = I0 + G0 and consumption C = α + β(Y - T) = Y - I0 - G0

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