1. Assume an economy where spending for each sector is: Household: C = 800 + 0.95Qd Business: I = 3000 Public: G = 4000, Tr = 7000, Tx = 1000 + 0.3Q Foreign: X = 1700, Im = 200 + 0.165Q Solve for Autonomous Spending, Spending Multiplier, Disposable Income, Consumption Expenditure, Household Savings, Imports, Net Exports, Government Expenditure, Budget Deficit Q= AS x SM Tx = Txo +tQ (Tax Equation) Tr = Tro (Transfer Payments) Qd = Q - Tx + Tr (Disposable Income) C = a + bQd (Consumption Equation) I = Io (Investment Expenditure) G = Go (Government Purchases) X = Xo (Exports) Im = Imo + mQ (Import Equation) NX = X - Im (Net Exports) GE = G + Tr (Government Expenditure) BD = GE -Tx (Budget Deficit) S = Qd -C (Savings) AS = (a + Io + Go + Xo - Imo + b(Tro - Txo) ) SM = 1/(1-((1-t)b - m))
1. Assume an economy where spending for each sector is:
Household: C = 800 + 0.95Qd
Business: I = 3000
Public: G = 4000, Tr = 7000, Tx = 1000 + 0.3Q
Foreign: X = 1700, Im = 200 + 0.165Q
Solve for Autonomous Spending, Spending Multiplier, Disposable Income, Consumption Expenditure, Household Savings, Imports, Net Exports, Government Expenditure, Budget Deficit
Q= AS x SM
Tx = Txo +tQ (Tax Equation)
Tr = Tro (Transfer Payments)
Qd = Q - Tx + Tr (Disposable Income)
C = a + bQd (Consumption Equation)
I = Io (Investment Expenditure)
G = Go (Government Purchases)
X = Xo (Exports)
Im = Imo + mQ (Import Equation)
NX = X - Im (Net Exports)
GE = G + Tr (Government Expenditure)
BD = GE -Tx (Budget Deficit)
S = Qd -C (Savings)
AS = (a + Io + Go + Xo - Imo + b(Tro - Txo) )
SM = 1/(1-((1-t)b - m))
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