Consider the following open economy: C = 40 + 0.85x YD I = 1500 G = 1600 X = 240 M = 0.12x Y TR = 10 T= 0.16V If there is a $180 increase in government expenditure, what is the change in equilibrium real GDP

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Q: Consider the following open economy, which we shall call Gazzalestan. C=50+4/5 X YD. I=2000 G=1100…

A: C = 50 + 4/5Yd I = 2000 G = 1100 X = 150 M = 3/10Y T = 3/8Y

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