C = 160 + 0.7YD, T= 100, I= 150, G= 150, NX = 100 – 0.1Y. a. What is disposable income (YD)? b. What is equilibrium GDP (Y)? What is consumption spending at the equilibrium (C)? d. What is the value of multiplier? e. If government spending increases by 100 units how much does equilibrium income change? f. If government increases both taxes and government spending by 100 units how much does equilibrium income change? g. If this was a closed economy (NX=0), what would be the value of multiplier? Compare with the value you obtained previously for the open economy, and comment on why they are different.
C = 160 + 0.7YD, T= 100, I= 150, G= 150, NX = 100 – 0.1Y. a. What is disposable income (YD)? b. What is equilibrium GDP (Y)? What is consumption spending at the equilibrium (C)? d. What is the value of multiplier? e. If government spending increases by 100 units how much does equilibrium income change? f. If government increases both taxes and government spending by 100 units how much does equilibrium income change? g. If this was a closed economy (NX=0), what would be the value of multiplier? Compare with the value you obtained previously for the open economy, and comment on why they are different.
Chapter19: The Keynesian Model In Action
Section: Chapter Questions
Problem 5SQP
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q4.
suppose that economy is charactarized by the following equations
solve (a. b. c. d)
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