Given the following information about a nations economy, answer the questions below. C = 250 + .8
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Question:
- Given the following information about a nation’s economy, answer the questions below.
C = 250 + .8 Yd T = 100
I = 275
G = 175
X = 65
M = 70
- Use algebra to solve for equilibrium. (You must show ALL of your work.) Recall that in equilibrium, TE = TP =Y.
- Calculate the multiplier.
- Refer to part (a) and simplify the TE equation into standard slope-intercept form:
TE = A + MPC*Y If you can not easily see this in your algebra in part (a), simply take the given information and re-derive the equation by collecting like terms and simplifying.
- What is the sum of autonomous expenditures (A = intercept)?
- Use the equation in part c to graph the Keynesian AE curve for this economy. Make sure to identify the intercept (A), slope and equilibrium incom
- Is the government’s budget in balance? (Hint: Compare T & G) Is there a surplus or deficit?
Related Book For
Project Management A Managerial Approach
ISBN: 978-0470533024
8th edition
Authors: Jack R. Meredith, Samuel J. Mantel Jr.
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