Given the national income m (a) Write down the value of t (b) Graph the equilibrium equ determine the equilibrium (c) How will the equilibrium increases to 0.9?
Given the national income m (a) Write down the value of t (b) Graph the equilibrium equ determine the equilibrium (c) How will the equilibrium increases to 0.9?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Given the national income model Y = E; E=C+1 where C=280+ 0.6Y, Io = 80:
(a) Write down the value of the intercept and slope of the expenditure equation.
(b) Graph the equilibrium equation and the expenditure equation on the same diagram; hence,
determine the equilibrium level of income Y. (i) graphically, (ii) algebraically.
(c) How will the equilibrium level of income change if the marginal propensity to consume
increases to 0.9?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5e46eaee-2a3a-496a-a3e3-79b29e5fc71a%2F4ab1a730-bb9b-4218-bd9f-4cc4ecaddefb%2F78ehoge_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Given the national income model Y = E; E=C+1 where C=280+ 0.6Y, Io = 80:
(a) Write down the value of the intercept and slope of the expenditure equation.
(b) Graph the equilibrium equation and the expenditure equation on the same diagram; hence,
determine the equilibrium level of income Y. (i) graphically, (ii) algebraically.
(c) How will the equilibrium level of income change if the marginal propensity to consume
increases to 0.9?
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