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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Related Book For
International Finance Theory and Policy
ISBN: 978-0133423648
10th edition
Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz
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