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JAMB Economics 2023 Paper

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Question : 63

Total: 79

Calculate the equilibrium level of national income (Y) where Y = C + I + G; C = 100 + 0.75Y; I = 50; G = 200

2000
100
1500
1400

Solution:

y = $\frac{a + i + G}{1 - b}$

where b = 0.75

= $\frac{100 + 50 + 200}{1 - 075}$

=

\frac{350}{0.25}

= 1400

Alternatively:

Y = C + I + G

Y = 100 + 0.75Y + 50 + 200

Y - 0.75Y = 350

Y( 1 - 0.75) = 350

= $\frac{350}{0.25}$

Y = 1400

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