° Consider the following Open Economy with the following parameters, in billions: Consumption (C) = 500 + .75(Yo). Government Spending (G) = 800. Personal Disposable Income (YD) = Y - T + TR Transfers (TR) = 400. Taxes (T) = (1/3)Y. Investment (I) = 400. Exports (X) = 200. In this Economy, Equilibrium Income is Spending/Investment Multiplier is Imports (IM) = 400. the Government Budget is and the Government Select one: a. 3600 billion, balanced, 2 b. 6000 billion, Surplus of 600 billion, 4 c. 3600 billion, Surplus of 80 billion, 4 d. 4500 billion, Surplus of 100 billion, 2.5 e. 2600, Deficit of 333 billion, 4

MACROECONOMICS
14th Edition
ISBN:9781337794985
Author:Baumol
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Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?
Section9.A: The Simple Algebra Of Income Determination And The Multiplier
Problem 5TY
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°
Consider the following Open Economy with the following parameters, in billions:
Consumption (C) = 500 + .75(Yo).
Government Spending (G) = 800.
Personal Disposable Income (YD) = Y - T + TR
Transfers (TR) = 400. Taxes (T) = (1/3)Y.
Investment (I) = 400. Exports (X) = 200.
In this Economy, Equilibrium Income is
Spending/Investment Multiplier is
Imports (IM) = 400.
the Government Budget is
and the Government
Select one:
a. 3600 billion, balanced, 2
b. 6000 billion, Surplus of 600 billion, 4
c. 3600 billion, Surplus of 80 billion, 4
d. 4500 billion, Surplus of 100 billion, 2.5
e. 2600, Deficit of 333 billion, 4
Transcribed Image Text:° Consider the following Open Economy with the following parameters, in billions: Consumption (C) = 500 + .75(Yo). Government Spending (G) = 800. Personal Disposable Income (YD) = Y - T + TR Transfers (TR) = 400. Taxes (T) = (1/3)Y. Investment (I) = 400. Exports (X) = 200. In this Economy, Equilibrium Income is Spending/Investment Multiplier is Imports (IM) = 400. the Government Budget is and the Government Select one: a. 3600 billion, balanced, 2 b. 6000 billion, Surplus of 600 billion, 4 c. 3600 billion, Surplus of 80 billion, 4 d. 4500 billion, Surplus of 100 billion, 2.5 e. 2600, Deficit of 333 billion, 4
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