(1) Consumption function: C = 100 + .8Y, (2) Planned investment: I = 38 (3) Government spending: G = 75 (4) Exports: EX = 25 (5) Imports: IM = .05 Y4 (6) Disposable income: Y= Y-T (7) Taxes: T= 40 (8) Planned aggregate expenditure: AE = C + I+ G+ EX– IM (9) Definition of equilibrium income: Y = AE

(1) Consumption function: C = 100 + .8Y, (2) Planned investment: I = 38 (3) Government spending: G = 75 (4) Exports: EX = 25 (5) Imports: IM = .05 Y4 (6) Disposable income: Y= Y-T (7) Taxes: T= 40 (8) Planned aggregate expenditure: AE = C + I+ G+ EX– IM (9) Definition of equilibrium income: Y = AE

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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