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Consider the following model of a very simple economy. Household saving and investment behavior depend in part on wealth (accumulated savings and inheritance). In the late 1990s many were concerned with very large increases in stock values (a form of wealth) and its possible effect on saving and investment The following consumption function incorporates wealth (W) as a determinant of consumption. We have the following information on consumption (C) and investment (1) C 50+0.60Y+0.05W 1=150 • W-800 We are ignoring the fact that saving adds to the afock of wealth Calculate the values of equilibrium Y, C, and saving (S) (Enter your responses as integers) Y= $=$

Consider the following model of a very simple economy. Household saving and investment behavior depend in part on wealth (accumulated savings and inheritance). In the late 1990s many were concerned with very large increases in stock values (a form of wealth) and its possible effect on saving and investment The following consumption function incorporates wealth (W) as a determinant of consumption. We have the following information on consumption (C) and investment (1) C 50+0.60Y+0.05W 1=150 • W-800 We are ignoring the fact that saving adds to the afock of wealth Calculate the values of equilibrium Y, C, and saving (S) (Enter your responses as integers) Y= $=$

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K Consider the following model of a very simple economy. Household saving and investment behavior depend in part on wealth (accumulated savings and inheritance). In the late 1990s many were concerned with very large increases in stock values (a form of wealth) and its possible effect on saving and investment The following consumption function incorporates wealth (W) as a determinant of consumption. We have the following information on consumption (C) and investment (1) C 50+0.60Y+0.05W 1=150 • W-800 We are ignoring the fact that saving adds to the afock of wealth Calculate the values of equilibrium Y, C, and saving (S) (Enter your responses as integers) Y= $=$
Transcribed Image Text:K Consider the following model of a very simple economy. Household saving and investment behavior depend in part on wealth (accumulated savings and inheritance). In the late 1990s many were concerned with very large increases in stock values (a form of wealth) and its possible effect on saving and investment The following consumption function incorporates wealth (W) as a determinant of consumption. We have the following information on consumption (C) and investment (1) C 50+0.60Y+0.05W 1=150 • W-800 We are ignoring the fact that saving adds to the afock of wealth Calculate the values of equilibrium Y, C, and saving (S) (Enter your responses as integers) Y= $=$
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