If C = 200 + 0.8Y, I = 600, what is the national income?

Question: If C = 200 + 0.8Y, I = 600, what is the national income?

Options:

40
400
4000
40000

✅ Explanation: In a simple macroeconomic model, national income (Y) is calculated as:
Y = C + I

• where:
-Y = National Income
-C = Consumption
-I = Investment

• We are given:
-C = 200 + 0.8Y
-I = 600

• Substituting these values into the equation for national income:
Y = (200 + 0.8Y) + 600

• Combining like terms:
0.2Y = 800

• Solving for Y:
Y = 800 / 0.2 = 4000