Given the following simple Keynesian model: E = C + I + G + X – M C = 50 + 0.85Ya Ya = Y – T I = 150 G = 300 X = 80 %3D T = 400 M = 10 + 0.05Y Y = E in equilibrium (a) Determine the equilibrium level of income. (b) When the equilibrium income level is attained, is there a surplus or a deficit in the current account? Of how much? (c) What is the size of the autonomous spending multiplier?

Given the following simple Keynesian model: E = C + I + G + X – M C = 50 + 0.85Ya Ya = Y – T I = 150 G = 300 X = 80 %3D T = 400 M = 10 + 0.05Y Y = E in equilibrium (a) Determine the equilibrium level of income. (b) When the equilibrium income level is attained, is there a surplus or a deficit in the current account? Of how much? (c) What is the size of the autonomous spending multiplier?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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