(1). Consider the following macroeconomic model of Tropicana. Y = C+1+G C = 90 + 0.9Y. ..(Income identity) (Consumption) (Investment) (Government) (Money market Equilibrium) | = 900-90OR.. G = Go M = (0.9Y-900R) P. %3D Y = aggregate real output, R = the interest rate, M = the money supply and P the price level. Limit figures to one decimal place when answering the questions below except where many zeros are involved. (a)Tropicana has been described as a closed economy. What does this mean? Is this evident from the macroeconomic description of Tropicana? (b)Derive the expression for aggregate real output Y. (c)Briefly explain why the expression in part (b) is an aggregate demand equation (curve). Lcunply is $800 government spending is $1000,

(1). Consider the following macroeconomic model of Tropicana. Y = C+1+G C = 90 + 0.9Y. ..(Income identity) (Consumption) (Investment) (Government) (Money market Equilibrium) | = 900-90OR.. G = Go M = (0.9Y-900R) P. %3D Y = aggregate real output, R = the interest rate, M = the money supply and P the price level. Limit figures to one decimal place when answering the questions below except where many zeros are involved. (a)Tropicana has been described as a closed economy. What does this mean? Is this evident from the macroeconomic description of Tropicana? (b)Derive the expression for aggregate real output Y. (c)Briefly explain why the expression in part (b) is an aggregate demand equation (curve). Lcunply is $800 government spending is $1000,

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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