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7. Assume consumption is represented by the following: C = 400+.75Y. Also assume that planned investment (I) equals 100. a. Given the information, calculate the equilibrium level of income. b. What is the savings function? c. Given the information, calculate the level of consumption and saving that occurs at the equilibrium level of income. d. Suppose planned investment increases by 100. i. Calculate the new equilibrium level of income. ii. Given your answer, what is the size of the multiplier for this economy? e. Use the Keynesian cross diagram to reflect both equilibrium output.

7. Assume consumption is represented by the following: C = 400+.75Y. Also assume that planned investment (I) equals 100. a. Given the information, calculate the equilibrium level of income. b. What is the savings function? c. Given the information, calculate the level of consumption and saving that occurs at the equilibrium level of income. d. Suppose planned investment increases by 100. i. Calculate the new equilibrium level of income. ii. Given your answer, what is the size of the multiplier for this economy? e. Use the Keynesian cross diagram to reflect both equilibrium output.

Chemistry
Chemistry
10th Edition
ISBN:9781305957404
Author:Steven S. Zumdahl, Susan A. Zumdahl, Donald J. DeCoste
Publisher:Steven S. Zumdahl, Susan A. Zumdahl, Donald J. DeCoste
Chapter1: Chemical Foundations
Section: Chapter Questions
Problem 1RQ: Define and explain the differences between the following terms. a. law and theory b. theory and...
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7. Assume consumption is represented by the following: C = 400+.75Y. Also assume that planned investment (I) equals 100. a. Given the information, calculate the equilibrium level of income. b. What is the savings function? c. Given the information, calculate the level of consumption and saving that occurs at the equilibrium level of income. d. Suppose planned investment increases by 100. i. Calculate the new equilibrium level of income. ii. Given your answer, what is the size of the multiplier for this economy? e. Use the Keynesian cross diagram to reflect both equilibrium output.
Transcribed Image Text:7. Assume consumption is represented by the following: C = 400+.75Y. Also assume that planned investment (I) equals 100. a. Given the information, calculate the equilibrium level of income. b. What is the savings function? c. Given the information, calculate the level of consumption and saving that occurs at the equilibrium level of income. d. Suppose planned investment increases by 100. i. Calculate the new equilibrium level of income. ii. Given your answer, what is the size of the multiplier for this economy? e. Use the Keynesian cross diagram to reflect both equilibrium output.
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