If C = 200 + 0.5Y and I = 100, then the equilibrium level of income is
A) 175.
B) 300.
C) 400.
D) 600.

Name: If C = 200 + 0.5Y and I = 100, then the equilibrium level of income is A) 175. B) 300. C) 400. D) 600.
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Quizplus · Accepted Answer

The equilibrium level of income is found where aggregate demand equals aggregate supply. Here, aggregate demand (AD) is C + I = 200 + 0.5Y + 100. Setting AD equal to Y (income), we have Y = 300 + 0.5Y. Solving for Y gives Y = 600.