1. Let the equilibrium condition for national income be S(Y) + T(Y) = }{Y)+ Ge where S, Y, T, I, and G stand for saving, national income, taxes, investment, and gov- ernment expenditure, respectively. All derivatives are continuous. (a) Interpret the economic meanings of the derivatives S', T', and !'. (b) Check whether the conditions of the implicit-function theorem are satisfied. If so, write the equilibrium identity. (C) Find (dY*/dGo) and discuss its economic implications. (S', T', I' > 0; S'+ I' > l')

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Equations and Inequations

Equations and inequalities describe the relationship between two mathematical expressions.

Linear Functions

A linear function can just be a constant, or it can be the constant multiplied with the variable like x or y. If the variables are of the form, x2, x1/2 or y2 it is not linear. The exponent over the variables should always be 1.