2. A SIMPLE ECONOMY Suppose that the economy is characterized by the following behavioural equations: C...

 

Transcribed Image Text:

2. A SIMPLE ECONOMY Suppose that the economy is characterized by the following behavioural equations: C 160 +0.6Y ¡ = 150 G = 150 T = 100 Solve for a. equilibrium GDP (Y). b. disposable income (YD). c. consumption spending (C). 3. THE CONCEPT OF EQUILIBRIUM For the economy in question 2, a. Assume output is equal to 900. Compute total demand. Is it equal to production? Explain. b. Assume output is equal to 1000. Compute total de- mand. Is it equal to production? Explain. c. Assume output is equal to 1000. Compute private sav- ing. Is it equal to investment? Explain. 2. A SIMPLE ECONOMY Suppose that the economy is characterized by the following behavioural equations: C 160 +0.6Y ¡ = 150 G = 150 T = 100 Solve for a. equilibrium GDP (Y). b. disposable income (YD). c. consumption spending (C). 3. THE CONCEPT OF EQUILIBRIUM For the economy in question 2, a. Assume output is equal to 900. Compute total demand. Is it equal to production? Explain. b. Assume output is equal to 1000. Compute total de- mand. Is it equal to production? Explain. c. Assume output is equal to 1000. Compute private sav- ing. Is it equal to investment? Explain.

Answer rating: 100% (QA)

To solve for equilibrium GDP Y disposable income YD and consumption spending C we need additional in... View the full answer