To determine macroeconomic equilibrium, we start with the fundamental equation where Gross Domestic Product (GDP), denoted as \( Y \), is equal to the sum of consumption (\( C \)), investment (\( I \)), government spending (\( G \)), and net exports (\( NX \)). This can be expressed as:

\[ Y = C + I + G + NX \]

In this scenario, we are given specific values for consumption, investment, and government spending, while net exports are derived from the difference between exports and imports. The consumption function is defined as:

\[ C = 2000 + 0.65Y \]

Investment (\( I \)) is provided as 3200, and government spending (\( G \)) is 28100. To find net exports (\( NX \)), we use the formula:

\[ NX = X - M \]

where \( X \) represents exports and \( M \) represents imports. In this case, exports are 500 and imports are 1500, leading to:

\[ NX = 500 - 1500 = -1000 \]

Now, substituting these values into the equilibrium equation gives us:

\[ Y = (2000 + 0.65Y) + 3200 + 28100 - 1000 \]

Next, we simplify the constants:

\[ 2000 + 3200 + 28100 - 1000 = 7,300 \]

Thus, the equation simplifies to:

\[ Y = 7300 + 0.65Y \]

To isolate \( Y \), we rearrange the equation by subtracting \( 0.65Y \) from both sides:

\[ Y - 0.65Y = 7300 \]

This simplifies to:

\[ 0.35Y = 7300 \]

To solve for \( Y \), we divide both sides by 0.35:

\[ Y = \frac{7300}{0.35} \approx 20,857.14 \]

Thus, the equilibrium GDP is approximately 20,857.14. This value indicates the level of output where aggregate expenditures equal GDP, confirming the balance in the economy.

Struggling with Macroeconomics?