Formula

Equilibrium Equation with Y Factored Out

By gathering all terms containing aggregate output (Y) onto one side of the goods market equilibrium equation, it becomes possible to factor out Y. This algebraic step yields the equation Y(1c1)=c0+IY(1-c_1) = c_0 + I, which consolidates autonomous spending (c0+Ic_0 + I) on the right and sets up the equation for the final step of isolating Y.

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Updated 2025-10-04

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