If S = -200 + 0.2Y and I = 100, then the equilibrium level of income is
A) 1,200.
B) 1,500.
C) 3,000.
D) 4,000.

Name: If S = -200 + 0.2Y and I = 100, then the equilibrium level of income is A) 1,200. B) 1,500. C) 3,000. D) 4,000.
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Question

Quizplus · Accepted Answer

At equilibrium, S (savings) should be equal to I (investment).
So, -200 + 0.2Y = 100
0.2Y = 300
Y = 1,500
Therefore, the equilibrium level of income is 1,500.