2. Consider an economy described by the following income-expenditure model. Theaverage propensity to consume is constant and equal to. The fiscal pressureis constant and equal to 1. Public transfers are equal to zero. Investmentis I = 500. The budget of the State records a deficit Dequilibrium level of output.100. Calculate the

Average propensity to consume: C/Yd = (4/5)=> C = (4/5) *Yd ------------>…

Consider an economy described by the following income-expenditure model. The average propensity to consume is constant and equal to. The fiscal pressure is constant and equal to = Public transfers are equal to zero. Investment is I = 500. The budget of the State records a deficit D = 100. Calculate the equilibrium level of output.

Consider an economy described by the following income-expenditure model. The average propensity to consume is constant and equal to. The fiscal pressure is constant and equal to = Public transfers are equal to zero. Investment is I = 500. The budget of the State records a deficit D = 100. Calculate 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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