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

To find the consumption at equilibrium, we need to use the given equations and information.

The consumption function is given by C = 200 + 0.4(Y - T), where Y represents income and T represents taxes.

From the given information, we know that T = 300.

To find the equilibrium, we need to set the total output (Y) equal to the total spending in the economy.

Total spending is given by C + I + G, where I represents investment and G represents government spending.

From the given information, we know that I = 300 and G = 400.

So, the equation for total spending becomes C + 300 + 400.

To find the equilibrium, we set total spending equal to total output:

C + 300 + 400 = Y

Now, substitute the value of T into the consumption function:

C = 200 + 0.4(Y - 300)

Substitute the equation for total spending into the equation for total output:

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

Simplify the equation:

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

Combine like terms:

880 + 0.4Y = Y

Subtract 0.4Y from both sides:

880 = 0.6Y

Divide both sides by 0.6:

Y = 880 / 0.6

Y = 1466.67

Now, substitute the value of Y back into the consumption function to find the consumption at equilibrium:

C = 200 + 0.4(1466.67 - 300)

C = 200 + 0.4(1166.67)

C = 200 + 466.67

C = 666.67

Therefore, the consumption at equilibrium is 666.67.