Given National Income (Y) as: Y = C + I + G + (X - M) where C = £2,500m I = £500m G = £600m X = £300m M = £200m (i) State what each of the letters in the formula above represents. (ii) Calculate, using the figures provided, the level of National Income: (Show your workings in your answer book.)

Leaving Cert Economics National Income: Given National Income (Y) as: Y

Given National Income (Y) as: Y = C + I + G + (X - M) where C = £2,500m I = £500m G = £600m X = £300m M = £200m (i) State what each of the letters in the formula above represents - Leaving Cert Economics - Question 6(a) - 2018

Question 6(a)

Given-National-Income-(Y)-as:--Y-=-C-+-I-+-G-+-(X---M)-where--C-=-£2,500m--I-=-£500m--G-=-£600m--X-=-£300m--M-=-£200m--(i)-State-what-each-of-the-letters-in-the-formula-above-represents-Leaving Cert Economics-Question 6(a)-2018.png

Given National Income (Y) as: Y = C + I + G + (X - M) where C = £2,500m I = £500m G = £600m X = £300m M = £200m (i) State what each of the letters in the form... show full transcript

Worked Solution & Example Answer:Given National Income (Y) as: Y = C + I + G + (X - M) where C = £2,500m I = £500m G = £600m X = £300m M = £200m (i) State what each of the letters in the formula above represents - Leaving Cert Economics - Question 6(a) - 2018

Step 1

(i) State what each of the letters in the formula above represents.

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Answer

Each letter in the formula represents the following:

C: Consumption - the total spending by households on goods and services.
I: Investment - the spending by businesses on capital goods.
G: Government expenditure - total government spending on goods and services.
X: Exports - the total value of goods and services sold to other countries.
M: Imports - the total value of goods and services purchased from other countries.

Step 2

(ii) Calculate, using the figures provided, the level of National Income:

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Answer

To calculate National Income (Y), substitute the values into the formula:

$Y = C + I + G + (X - M)$

Substituting the given figures:

$Y = £2,500m + £500m + £600m + (£300m - £200m)$

Calculate the net exports (X - M):

$X - M = £300m - £200m = £100m$

Now, substituting the net exports back into the equation:

$Y = £2,500m + £500m + £600m + £100m$

Performing the addition:

$Y = £2,500m + £500m = £3,000m$ $Y = £3,000m + £600m = £3,600m$ $Y = £3,600m + £100m = £3,700m$

Thus, the level of National Income is £3,700m.

Given National Income (Y) as: Y = C + I + G + (X - M) where C = £2,500m I = £500m G = £600m X = £300m M = £200m (i) State what each of the letters in the formula above represents - Leaving Cert Economics - Question 6(a) - 2018

Worked Solution & Example Answer:Given National Income (Y) as: Y = C + I + G + (X - M) where C = £2,500m I = £500m G = £600m X = £300m M = £200m (i) State what each of the letters in the formula above represents - Leaving Cert Economics - Question 6(a) - 2018

(i) State what each of the letters in the formula above represents.

(ii) Calculate, using the figures provided, the level of National Income:

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