Consider an economy in which all taxes are autonomous and the following values of autonomous consumption, planned investment, government expenditure, autonomous taxes, and the marginal propensity to consume are given: Ca = 1,400; Ip = 1,800; G = 1,950; Ta = 1,750; c = 0.6 a. What is the level of consumption when the level of income (Y) equals $10,000? b.What is the level of saving when the level of income (Y) equals $10,000? c. What is the level of planned investment when the level of income (Y) equals $10,000? What is the level of actual investment? What is the level of unintended inventory investment? d. Show that injections equal leakages when income (Y) equals $10,000. e.Is the economy in equilibrium when income (Y) = $10,000? If not, what is the equilibrium level of income for the economy described in this question?

Consider an economy in which all taxes are autonomous and the following values of autonomous consumption, planned investment, government expenditure, autonomous taxes, and the marginal propensity to consume are given: Ca = 1,400; Ip = 1,800; G = 1,950; Ta = 1,750; c = 0.6 a. What is the level of consumption when the level of income (Y) equals $10,000? b.What is the level of saving when the level of income (Y) equals $10,000? c. What is the level of planned investment when the level of income (Y) equals $10,000? What is the level of actual investment? What is the level of unintended inventory investment? d. Show that injections equal leakages when income (Y) equals $10,000. e.Is the economy in equilibrium when income (Y) = $10,000? If not, what is the equilibrium level of income for the economy described in this question?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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