The following information is for a private closed economy, where I_g is gross investment, S is saving, and Y is gross domestic product (GDP) .I_g = 80 S = -80 + 0.4Y
Refer to the above information.The equilibrium GDP will be:

Question

Quizplus · Accepted Answer

In equilibrium, saving (S) equals gross investment (I_g). Set S = I_g: -80 + 0.4Y = 80. Solving for Y gives Y = 400.

The Following Information Is for a Private Closed Economy, Where