Question: You are given the following functions that describe aggregate behavior in an open economy: C = 2 0 0 + 0 . 8 Y d

You are given the following functions that describe aggregate behavior in an open economy:
C=200+0.8Yd
I=100
G=60
NT=5+0.1Y
x=40
IM=20+0.2Y
where C is consumption, I is private investment spending, G is government spending, NT is net taxes (i.e. taxed minus transfers), X is exports and IM is imports.
Calculate expendeture multiplier

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!