Suppose that the economy is characterized by the following b

Suppose that the economy is characterized by the following behavioral equations:

C =160+0.9YD

I = 140

G = 150

T = 100

Equilibrium output(Y)=

Total demand(Z)=

According to national income accounting,

Y= C+I+G

AD=C+I+G

Y=160+0.9YD+140+150

Y=160+0.9(Y-100)+140+150

Y=450+0.9Y-90

Y-0.9Y= 360

0.1Y=360

Y =360/0.1

Y=3600

Hence equilibrium output will be 3600 units.

AD=C+I+G

AD=160+0.9YD+140+150

AD=160+0.9(3600-100)+140+150

AD=450+0.9*3500

AD=450+3150

AD=3600

Hence total demand is also 3600 units.