The values of an economy are given as follows. C=100+0.75Yp - 1000i, l=1000 - 100i,G=1200,T=200, NX=250...

 

Transcribed Image Text:

The values of an economy are given as follows. C=100+0.75Yp - 1000i, l=1000 - 100i,G=1200,T=200, NX=250 - 500i, i=0.1 A: Consumption expenditures, Yp: Disposable income, i: interest rate, 1: Investments, G: Public expenditures, trimin T: Taxes, NX: Net exports a) Find the values C, Yp and Y for the economy. b) How does the doubling of public expenditures affect the total output? c) How does a 10 percent increase in the interest rate affect output? The values of an economy are given as follows. C=100+0.75Yp - 1000i, l=1000 - 100i,G=1200,T=200, NX=250 - 500i, i=0.1 A: Consumption expenditures, Yp: Disposable income, i: interest rate, 1: Investments, G: Public expenditures, trimin T: Taxes, NX: Net exports a) Find the values C, Yp and Y for the economy. b) How does the doubling of public expenditures affect the total output? c) How does a 10 percent increase in the interest rate affect output?

Answer rating: 100% (QA)

a To find the values of C Yp and Y we need to use the equation for national income Y C I G NX We als... View the full answer