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In a private closed economy, (a) the marginal propensity to save is 0.25, (b) consumption equals income at $120 billion, and (c) the level of investment is $40 billion. What is the equilibrium level of
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In a private closed economy, (a) the marginal propensity to save is 0.25, (b) consumption equals income at $120 billion, and (c) the level of investment is $40 billion. What is the equilibrium level of income?

User Siliconpi
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1 Answer

2 votes

Answer:

$280 billion

Step-by-step explanation:

An economy reaches the equilibrium when there is an equal amount of supply and demand.

User Robasaurus
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