Final answer:
The output (y) can be calculated when the government spending (g) and desired consumption (cd) are given.
Step-by-step explanation:
The output (y) can be calculated when the government spending (g) and desired consumption (cd) are given. In this case, the economic parameters are the following:
- Y = National income
- T = Taxes = 0.3Y
- C = Consumption = 200+ 0.9(Y – T)
- I = Investment = 600
To calculate the output (y), you can use the equation:
y = C + I + G, where C is consumption, I is investment, and G is government spending.
Substituting the values from the economic parameters, we get:
y = (200 + 0.9(Y – T)) + 600 + g
Solving this equation will give you the value for the output (y).