Consider the simplified national income model: Y = C + I(1) Where Y is GDP (national income),
Fantastic news! We've Found the answer you've been seeking!
Question:
Consider the simplified national income model:
Y = C + I…………(1)
Where Y is GDP (national income), C is consumption, and I am investment. Consumption is determined by a behavioral equation, which in this problem takes the form
C= 3000+ 2/3Y……..(2)
Where Y and C are endogenous variables and Investment is exogenous, and, initially we assume
I =500……………….(3)
Determine the equilibrium level of national income (Y) and consumption (C) by using reduced form, and matrix algebra.
Related Book For
Posted Date: