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Consider the following is the economy of Country W: C = 100 + 0.8Y                      I = 150        Answer the following questions: a) Determine the equilibrium level of output algebraically using the aggregate expenditure approach.   b) Graphically illustrate the equilibrium level of output from part (a).   c) Suppose that the initial aggregate output is 550. Calculate the change in inventories that will occur in this period.

Consider the following is the economy of Country W: C = 100 + 0.8Y                      I = 150        Answer the following questions: a) Determine the equilibrium level of output algebraically using the aggregate expenditure approach.   b) Graphically illustrate the equilibrium level of output from part (a).   c) Suppose that the initial aggregate output is 550. Calculate the change in inventories that will occur in this period.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Consider the following is the economy of Country W:

C = 100 + 0.8Y

                     I = 150

 

     Answer the following questions:

  1. a) Determine the equilibrium level of output algebraically using the aggregate expenditure approach.

 

  1. b) Graphically illustrate the equilibrium level of output from part (a).

 

  1. c) Suppose that the initial aggregate output is 550. Calculate the change in inventories that will occur in this period.

 

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