With C = c̄ + bY and autonomous investment Ī, equilibrium income is

(c̄ + Ī) ÷ (1 − b)Correct answerYour answer(c̄ + Ī) ÷ bCorrect answerYour answer(c̄ + Ī) × (1 − b)Correct answerYour answerc̄ ÷ (1 − b)Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

Y = c̄ + bY + Ī, so Y − bY = c̄ + Ī.
Y = (c̄ + Ī) ÷ (1 − b).

Worth noting

c̄ ÷ (1 − b) is the break-even income, which leaves out investment.

Concept: Equilibrium formula
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsFinding equilibrium income

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With C = c̄ + bY and autonomous investment Ī, equilibrium income is

Explanation