Use the following information below to answer the following question(s): C = 800 + 0.65YD
I = 750
G = 1500
T = 900
-Refer to the information above. The equilibrium level of GDP for the above economy equals:

Question

Quizplus · Accepted Answer

Equilibrium GDP is found by solving for YD in the consumption function and then substituting that value into the equation for aggregate expenditure (AE). AE = C + I + G + NX. Since NX is not given, we will assume it is zero.C = 800 + 0.65YDYD = (C - 800) / 0.65YD = (800 + 0.65YD - 800) / 0.65YD = YDAE = 800 + 0.65YD + 750 + 1500 + 0AE = 3050 + 0.65YDEquilibrium GDP occurs when AE = YD. So, we can set AE equal to YD and solve for YD.3050 + 0.65YD = YD0.35YD = 3050YD = 3050 / 0.35YD = 8714.29Therefore, the equilibrium level of GDP for the above economy is 8714.29.

Use the Following Information Below to Answer the Following Question(s)