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JAMB Economics 2005 Question 7

Question 7

National Income

Given that Y = C + I, where C = 50 + 0.75 and I = N45m, what is the equilibrium level of income?

  1. A.N380 m
  2. B.N 20 m
  3. C.N180 m
  4. D.N200 m
Show the answer and explanation

Answer: A (N380 m)

Explanation

Taking C = 50 + 0.75Y: Y = 50 + 0.75Y + 45, so 0.25Y = 95 and Y = 380 (₦380 million).