Given the data below solve a-fAD =C+I+G+NXI = 500 - 20iM - 400C - 200 + (4/5)YDG - 200P -1YD Y-TANX =0ma -(1/4)Y + 200 - 20 iTA - (1/4)Ya. Solve for the equilibrium level of Y and ib. Solve for the equilibrium level of Cc. Solve for the equilibrium level of Sd. Solve for the equilibrium level of YDe. What will be the level of crowding out if G increases by 50?f. Using the ISLM model graph an increase in government spending. Explain each step in the adjustment process

Note : Due to multiple sub-parts,the first three sub-parts have been answered. a. For IS equation:

AD -C+I+G+ NX I - 500 - 20i M - 400 C - 200 + (4/5)YD G - 200 P -1 YD - Y-TA NX -0 ma -(1/4)Y + 200 -20 i TA (1/4)Y a. Solve for the equilibrium level of Y and i b. Solve for the equilibrium level of C c. Solve for the equilibrium level of S

AD -C+I+G+ NX I - 500 - 20i M - 400 C - 200 + (4/5)YD G - 200 P -1 YD - Y-TA NX -0 ma -(1/4)Y + 200 -20 i TA (1/4)Y a. Solve for the equilibrium level of Y and i b. Solve for the equilibrium level of C c. Solve for the equilibrium level of S

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

Given the data below solve a-f
AD =C+I+G+NX
I = 500 - 20i
M - 400
C - 200 + (4/5)YD
G - 200
P -1
YD Y-TA
NX =0
ma -(1/4)Y + 200 - 20 i
TA - (1/4)Y
a. Solve for the equilibrium level of Y and i
b. Solve for the equilibrium level of C
c. Solve for the equilibrium level of S
d. Solve for the equilibrium level of YD
e. What will be the level of crowding out if G increases by 50?
f. Using the ISLM model graph an increase in government spending. Explain each step in the adjustment process

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