Consider the following economy:(1) C = 1000 + 0.3 (Y - T)(2) I = 700(3) G = 500(4) T = 100+0.1YWhat is the income of equilibrium? Note that now taxes change with income.

To find the income of equilibrium, we need to determine the level of income (Y) at which aggregate demand (AD) equals aggregate supply (AS).

Aggregate demand (AD) is the sum of consumption (C), investment (I), and government spending (G).

From equation (1), we have C = 1000 + 0.3(Y - T). Since T = 100 + 0.1Y (from equation 4), we can substitute this into equation (1) to get C = 1000 + 0.3(Y - (100 + 0.1Y)). Simplifying this equation, we have C = 1000 + 0.3(0.9Y - 100). Further simplifying, C = 1000 + 0.27Y - 30.

Next, we substitute the given values for investment (I) and government spending (G) into the equation. We have I = 700 and G = 500.

Now, we can write the aggregate demand equation as AD = C + I + G. Substituting the values we have, AD = (1000 + 0.27Y - 30) + 700 + 500. Simplifying this equation, AD = 2200 + 0.27Y.

Aggregate supply (AS) is equal to income (Y).

To find the income of equilibrium, we set AD equal to AS and solve for Y. So, 2200 + 0.27Y = Y. Rearranging this equation, we have 0.73Y = 2200. Dividing both sides by 0.73, we find Y = 3013.7.

Therefore, the income of equilibrium in this economy is approximately 3013.7.