In a model with no government or foreign sector, if autonomous consumption is Co = 80, investment is Io = 70, and the marginal propensity to save is s = 0.25, equilibrium income is

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Quizplus · Accepted Answer

The equilibrium income (Y) in a simple model with no government or foreign sector is calculated using the formula Y = (1/s) * (Co + Io). Here, s = 0.25, Co = 80, and Io = 70. So, Y = (1/0.25) * (80 + 70) = 4 * 150 = 600.

In a Model with No Government or Foreign Sector, If