Help please?

Question

if Y=600; G=100; T=150; I= 150 and assuming that household consume 80% of their disposable income, determine if the economy is in equilibrum

Answer 1

As I remember, Y = C + I + G at equilibrium

You don't have enough info. in your question. However, as taxation is 150 and Government spending is 100 it would appear that the government is trying to slow the economy down by removing money from it, thus reducing demand and reducing pressure on prices therefore holding inflation down.

Hope this little bit of waffle helps.

Relate all this to the circular flow of income.

Now, after reading the question again, Disp. Y = 80% of Y - I
= .8 x (600 - 150) = 360
Y = C + I + G
600 = 260 + 150 + 100
600 = 510
NOT in EQUILIBREIUM