1. 2. Assume consumption is represented by the following: C-400+.75Y. Also assume that planned investment (1)...

 

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1. 2. Assume consumption is represented by the following: C-400+.75Y. Also assume that planned investment (1) equals 100. (a) Given the information, calculate the equilibrium level of income. (b) Given the information, calculate the level of consumption and saving that occurs at the equilibrium level of income. (c) Suppose planned investment increases by 100. Calculate the new equilibrium level of income. Given your answer, what is the size of the multiplier for this economy? In a closed economy with a public sector prove that S+T-I+G. Assume an economy is represented by the following: C-100-994 (planned) 200 G-1000 T-1000 (a) Calculate the equilibrium level of output. (b) Based on your analysis in Part (a), calculate the levels of consumption and saving that occur when the economy is in equilibrium. (c) Now suppose planned investment rises by 100. Calculate the new equilibrium level of income. Given your answer, what is the size of the multiplier? 1. 2. Assume consumption is represented by the following: C-400+.75Y. Also assume that planned investment (1) equals 100. (a) Given the information, calculate the equilibrium level of income. (b) Given the information, calculate the level of consumption and saving that occurs at the equilibrium level of income. (c) Suppose planned investment increases by 100. Calculate the new equilibrium level of income. Given your answer, what is the size of the multiplier for this economy? In a closed economy with a public sector prove that S+T-I+G. Assume an economy is represented by the following: C-100-994 (planned) 200 G-1000 T-1000 (a) Calculate the equilibrium level of output. (b) Based on your analysis in Part (a), calculate the levels of consumption and saving that occur when the economy is in equilibrium. (c) Now suppose planned investment rises by 100. Calculate the new equilibrium level of income. Given your answer, what is the size of the multiplier?

Answer rating: 100% (QA)

a To calculate the equilibrium level of income we set planned aggregate expenditure PAE equal to actual aggregate expenditure AAE and solve for income ... View the full answer