Consider an economy with the following characteristics:
ishu
Que 5
Consider an economy with the following characteristics:
Consumption function: C = 40 + 0.9YD;
Planned investment: I = 40;
Government expenditure: G = 60;
The tax function: T = 0.2Y;
Exports of the country: X = 14
The import function: M = 10 + 0.02Y.
Assume there are no transfer payments and no autonomous taxes.
All variables are in billions of dollars. C is consumption expenditure; YD is disposable income; Y is real GDP; G is government purchases of goods and services; T is taxes; I is planned investment expenditure; X is exports, and M is imports.
a. Write the aggregate expenditure function. How much is the autonomous expenditure in this economy in billions of dollars? (2 marks)
b. What is the equilibrium level of income of the economy? (2 marks)
c. Define the concept of multiplier. Calculate the size of the multiplier of the economy if exports rise from $14 billion to $30 billion. (2 marks)
I
- 6 years ago
- 1
Purchase the answer to view it
- que5Economics101.docx
- I need someone help me with this project the class name Algorithms and Data Structures
- Due in the Morning .. please help me
- DONE
- Reflective Writing Prompt Jaeger Composition 1 / Fall 2016 Due Date: Review Syllabus
- For Writter A
- Security at Warehouses
- ANNOTATED
- question
- Bilingual and Esl
- 20mcq eBusiness Strategy (3)