Given the following model: Y = C + I + G + (X-M) Question Suppose that: Autonomous

Question:

Given the following model:

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

Question

Suppose that:

Autonomous Consumption = $500

MPC = 0.75

Taxes = $400

Investment = $500

Government Spending = $1200

Exports = $300

Imports = $500

Find the following: (2 points each)

A. Equilibrium income

B. Equilibrium consumption

C. Equilibrium saving

D. Write the savings function

E. Show that injections equal withdrawals

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International Finance Theory and Policy

ISBN: 978-0133423648

10th edition

Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz

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Question Posted: Jul 29, 2013 12:41 AM

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Given the following model: Y = C + I + G + (X-M) Question Suppose that: Autonomous

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A Equilibrium income Y C I G XM C 500 MPCY T So Y 500 MPCY ...View the full answer

International Finance Theory and Policy

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