Behavioural and structural equations of an economy are given below: C = 40 + bY %3D |= 50 crore %3D G = 40 crore X = 11 crore %3D M = 5 +0.2Y The marginal propensity to consume (b) is equal to 0.8 (a) Find the equilibrium national income. (b) Find foreign trade multiplier. (c) Find equilibrium value of imports. (d) If equilibrium national income falls short of full-employment income by Dollar 50, how much government should increase its expenditure to attain fullemployment?
Behavioural and structural equations of an economy are given below: C = 40 + bY %3D |= 50 crore %3D G = 40 crore X = 11 crore %3D M = 5 +0.2Y The marginal propensity to consume (b) is equal to 0.8 (a) Find the equilibrium national income. (b) Find foreign trade multiplier. (c) Find equilibrium value of imports. (d) If equilibrium national income falls short of full-employment income by Dollar 50, how much government should increase its expenditure to attain fullemployment?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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