Consider a closed economy:(1) C = 200 + 0.4 (Y-T)(2) I =300(3) G = 400(4) T = 300What is the income of equilibrium?

To find the income of equilibrium in a closed economy, we need to use the given equations.

The equation (1) represents consumption (C) as a function of income (Y) and taxes (T). It states that consumption is equal to 200 plus 0.4 times the difference between income and taxes. Mathematically, it can be written as C = 200 + 0.4(Y - T).

The equation (2) represents investment (I) and is given as 300.

The equation (3) represents government spending (G) and is given as 400.

The equation (4) represents taxes (T) and is given as 300.

To find the income of equilibrium, we need to set the total spending in the economy equal to the total income. In other words, we need to find the value of Y that satisfies the equation:

Y = C + I + G

Substituting the given equations, we have:

Y = (200 + 0.4(Y - 300)) + 300 + 400

Simplifying the equation, we get:

Y = 200 + 0.4Y - 120 + 300 + 400

Combining like terms, we have:

Y = 880 + 0.4Y

Subtracting 0.4Y from both sides, we get:

0.6Y = 880

Dividing both sides by 0.6, we find:

Y = 880 / 0.6

Calculating this, we get:

Y ≈ 1466.67

Therefore, the income of equilibrium in this closed economy is approximately 1466.67.