-Refer to Figure 11.2. Suppose that Ca = 40, MPC = 0.8, I = 10. Equilibrium income is
A) 40.
B) 50.
C) 250.
D) 400.

Name: -Refer to Figure 11.2. Suppose that Ca = 40, MPC = 0.8, I = 10. Equilibrium income is A) 40. B) 50. C) 250. D) 400.
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Question

-Refer to Figure 11.2. Suppose that Ca = 40, MPC = 0.8, I = 10. Equilibrium income is
A) 40. 
B) 50. 
C) 250. 
D) 400.

Quizplus · Accepted Answer

Equilibrium income (Y) is determined by the formula Y = (1/(1 - MPC)) * (Ca + I). Plugging in the given values, Y = (1/(1 - 0.8)) * (40 + 10) = 5 * 50 = 250.