In an economy, C = 200 + 0.75 Y is the consumption function where C is consumption expenditure and Y is National Income. Investment expenditure is 4000. Calculate equilibrium level of income and consumption expenditure.

C = 200 + 0.75Y

Y = C+I ,

Y = 200 + 0.75Y + 4000

Y - 0.75Y = 4200, 0.25Y = 4200

Y = 4200 / 0.25 = 16800

C = Y - I = 16800 - 4000 = 12800