Answer:
$2,000
Step-by-step explanation:
Given C = 200 + 0.75Y, and
I = 300
Where I denotes investment. In economics,
S = Y - C
Where S denotes saving. Therefore, we have:
S = Y - (200 + 0.75Y)
= Y - 200 - 0.75Y
S = 0.25Y - 200
At equilibrium in an economy, S = I, we therefore equate S and I and solve for Y as follows:
0.25Y - 200 = 300
0.25Y = 300 + 200
0.25Y = 500
Y = 500/0.25 = $2,000
Therefore, equilibrium GDP is $2,000 in this economy.