1. Suppose that the economy can be described by the following equations: C = 400 + (8/9)*DI I= 300 G = 800 T= (1/2)*Y (X- М) — 0. a. If national income (Y) increased by $1, by how much would consumption increase? What is the name of this concept? b. Find the equilibrium level of output.

1. Suppose that the economy can be described by the following equations: C = 400 + (8/9)DI I= 300 G = 800 T= (1/2)Y (X- М) — 0. a. If national income (Y) increased by $1, by how much would consumption increase? What is the name of this concept? b. Find the equilibrium level of output.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

1a) and b)

1. Suppose that the economy can be described by the following equations:
C = 400 + (8/9)*DI
I= 300
G= 800
T=(1/2)*Y
(X -М) — 0.
a. If national income (Y) increased by $1, by how much would consumption increase? What is
the name of this concept?
b. Find the equilibrium level of output.

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