Assume the economy is closed and there is no government. The aggregate demand componentsare described below:C = 100 + 0.6YI = 200What is the income of equilibrium?

In a closed economy with no government, the equilibrium income is determined where aggregate demand equals aggregate supply. In this case, aggregate demand is the sum of consumption (C) and investment (I).

The consumption function is given as C = 100 + 0.6Y, where Y is the income and 0.6 is the marginal propensity to consume. The investment is given as I = 200.

So, the aggregate demand (AD) is C + I = (100 + 0.6Y) + 200.

In equilibrium, aggregate demand equals income (Y), so we can set up the following equation:

Y = 100 + 0.6Y + 200

To solve for Y, first, simplify the equation:

Y = 300 + 0.6Y

Then, subtract 0.6Y from both sides to isolate Y on one side of the equation:

Y - 0.6Y = 300

This simplifies to:

0.4Y = 300

Finally, divide both sides by 0.4 to solve for Y:

Y = 300 / 0.4

Y = 750

So, the equilibrium income in this economy is 750.

In a closed economy with no government, the equilibrium income is determined where aggregate demand equals aggregate supply. In this case, aggregate demand is the sum of consumption (C) and investment (I).

The consumption function is given as C = 100 + 0.6Y, where Y is the national income and 0.6 is the marginal propensity to consume. Investment (I) is given as 200.

So, the aggregate demand (AD) is C + I = (100 + 0.6Y) + 200.

To find the equilibrium income, we set aggregate demand equal to income (Y), so:

Y = 100 + 0.6Y + 200

Rearranging the terms, we get:

0.4Y = 300

Finally, solving for Y, we find:

Y = 300 / 0.4 = 750

So, the equilibrium income in this economy is 750.