# Answer to Question #79155 in Macroeconomics for Bard

Question #79155

Given a hypothetical consumption function of the form:

Y = C + I0 + G0

C = α + β

Where: = Y – T

Y = Income

T = Taxes

Compute the equilibrium level of income and consumption (4 marks)

Y = C + I0 + G0

C = α + β

Where: = Y – T

Y = Income

T = Taxes

Compute the equilibrium level of income and consumption (4 marks)

Expert's answer

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 will be C = α + β(Y - T) = Y - I0 - G0

then the equilibrium level of income will be Y = α + β(Y - T) = I0 + G0 and consumption will be C = α + β(Y - T) = Y - I0 - G0

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