Consumption, ? = 0.8?? + 80, Tax, ? = 0.3? + 10 Investment, ? = −30r + 800 Money supply, ?s = 8000 and Money demands: ?1 = 0.2?, ?2 = −20? + 4000 i. Determine the values of national income, ?, and interest rate, ?, on the assumption that both the commodity and the money markets are in equilibrium. ii. Identify the autonomous components and induced components among the above equations. Explain the reasons why the components have been identified as autonomous or induced.
Consumption, ? = 0.8?? + 80, Tax, ? = 0.3? + 10 Investment, ? = −30r + 800 Money supply, ?s = 8000 and Money demands: ?1 = 0.2?, ?2 = −20? + 4000 i. Determine the values of national income, ?, and interest rate, ?, on the assumption that both the commodity and the money markets are in equilibrium. ii. Identify the autonomous components and induced components among the above equations. Explain the reasons why the components have been identified as autonomous or induced.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Consumption, ? = 0.8?? + 80,
Tax, ? = 0.3? + 10
Investment, ? = −30r + 800
Money supply, ?s = 8000 and
Money demands: ?1 = 0.2?, ?2 = −20? + 4000
i. Determine the values of
both the commodity and the
ii. Identify the autonomous components and induced components among the above
equations. Explain the reasons why the components have been identified as autonomous
or induced.
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