This question repeats the exercise of Question 10 , but for specific numerical values. The equations of the model are

a. Compute the \(A E\) function and plot it in a diagram. What is total autonomous expenditure?

b. What is the slope of the \(A E\) function?

c. Compute the equilibrium level of national income.

d. Suppose \(X\) rises from 50 to 100 . How does this affect the level of national income?

e. What is the simple multiplier in this model?

Data from exercise 10 This question requires you to solve a macro model algebraically. Reading the appendix to this chapter will help you to answer this question. But, just in case, we lead you through it step by step. The equations for the model are as follows:

Transcribed Image Text:

C = 50+0.7YD 1 = 75 G = 100 T= (0.2)Y X = 50 IM = (0.15)Y