Problem 2Consider an economy that is open to foreigntrade and is described by the following modelC= 100+0.9Yd|= 25Consumption functionInvestmentG=80GovernmentT=50ТаxesExportsImportsX=25M= 50Refer to problem 1. What is theequilibrium level of income? *Y= $1350Y= $1850Y= $2350Y= $2650 Refer to problem 1. If aggregateincome is $1300, what will be thechange in inventories?$50-$50O $5-$5Refer to problem 1. The savingequation is*O S= -1850+0.9YdO S= - 100+0.1YS= -100 +0.1YdS= - 1859 +0.9Y

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Consider an economy that is open to foreign trade and is described by the following model C= 100+0.9Yd Consumption function |= 25 Investment G=80 Government T=50 Тахes X=25 Exports Imports M= 50

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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