Consider the following economyC=1000+0.4(Y-T)I=500T=400G=300What is the investment of equilibrium?

To find the investment at equilibrium, we need to determine the level of income (Y) at which aggregate demand (AD) equals aggregate supply (AS). In this case, investment (I) represents a component of aggregate demand.

Given the following equations: C = 1000 + 0.4(Y - T) I = 500 T = 400 G = 300

We can start by substituting the given values of T and G into the consumption equation: C = 1000 + 0.4(Y - 400)

Next, we can express aggregate demand (AD) as the sum of consumption (C), investment (I), government spending (G), and net exports (NX): AD = C + I + G + NX

Since we are not given the value of net exports (NX), we will assume it to be zero for simplicity.

AD = C + I + G + NX = (1000 + 0.4(Y - 400)) + 500 + 300 + 0 = 1000 + 0.4Y - 160 + 500 + 300 = 1840 + 0.4Y

Now, we can set AD equal to aggregate supply (AS) to find the equilibrium level of income: AD = AS 1840 + 0.4Y = Y

Simplifying the equation: 0.4Y - Y = -1840 -0.6Y = -1840 Y = -1840 / -0.6 Y = 3066.67

Therefore, the investment at equilibrium is $500.