Question: Given C=$20 +0.80Yd, I =$60, G = $30, Yd = Y - Tn, Tn = Tx - Tr, Tr = $10 and Tx=$40. A. Find

Given C=$20 +0.80Yd, I =$60, G = $30, Yd = Y - Tn, Tn = Tx - Tr, Tr = $10 and Tx=$40.

A. Find equilibrium output.

B. Find consumption and saving at equilibrium output, Y.

Given C=$35 +0.80Yd, I =$70, G = $65, Yd = Y - Tn, Tn = Tx - Tr, Tr = 0 andTx=$10.

AFind equilibrium output.

B. Find consumption and saving at equilibrium output, Y.

C. Graph the consumption and savings functions on a single graph.

Suppose the Consumption function, C =$60 + 0.80Yd;

I =$70;

Y = Yd.

A. What happens to the equilibrium output, Y when I increase to $80.

B. Calculate the new value of Y when I = $80.

C. What happens to equilibrium output, Y when I decrease to $50?

D. Calculate the new value of Y when I = $50.

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