An economy is described by the following equations:
C = 10 + 0.7(Y-T)
Ip = 80
G = 104
NX = 15
T = 170
Y* = 600
Find a numerical equation linking planned aggregate expenditure to output.
Find autonomous expenditure and induced expenditure in this economy.
Find the value of a short-run equilibrium output and construct a Keynesian-cross diagram.
Find the effect on short-run equilibrium output of a decrease in government purchases from 104 to 89.
Find the effect on short-run equilibrium output of an increase in tax collections from 170 to 200 (Leave everything else in the original state).
Find the effect on short-run equilibrium output of a decrease in planned investment spending from 80 to 71 (Leave everything else in the original state).
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