In the simple economy where y = C + I, equilibrium output is determined at the level of income where saving equals investment.

Question

Quizplus · Accepted Answer

In the simple economy where y = C + I, equilibrium output occurs where saving (S) equals investment (I). This can be expressed as S = Y - C or S = I, where Y is the level of output (income). Therefore, the statement is true that equilibrium output is determined where saving equals investment.

In the Simple Economy Where Y = C + I