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An equation for aggregate expenditure is: ae = $3600 0.8y, in equilibrium, income 'y' = aggregate expenditure 'ae'. solve for y.

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ogechukwubenedict

Answer: $2000

Explanation: Aggregate expenditure is best defined as a measure of national income. It is employed in determining the total value of economic activities in the nation which is also known as the Gross domestic product (GDP) of that nation (measure of the economic production of a nation in financial capital terms over a specific period of time). In addition to this, it determines in entirety the total amount that companies and households apportion to spend on goods and services at every level of income.

If at equilibrium Y = AE,

Where AE = $3600 - 0.8Y,

Then Y = $3600 - 0.8Y

Collecting like terms together,

Y + 0.8 Y = $3600

1.8 Y = $3600

Y = $3600/1.8 = $2000.

ogorwyne

Given the question here, the solved value of y = $2000

The equation says that

Y = AE

From the definitions of terms that we have

AE = $3600-0.8y

AE stands for the term aggregate expenditure.

Y stands for income = Aggregate expenditure

So since Y = AE and AE = $300-0.8y,

Y =  $3600-0.8y,

From this equation, the next step is to collect like terms

y+0.8y = $3600

1.8y = $3600

We divide through this equation by 1.8

y = 3600/1.8

Y = $2000

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