Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Given this model, what would be the new equi8librium level of income were Investment spending to decline by 50?
![Q=AE,
Q
AQ
1
=
-
AE =C+I+G + Xn,
1
m pc
C = Ca + mpc Q
(C₁ + I + G + X ₁ )
a
n
·A (C ₂ + I + G + X ₁ )
a
n
1 m pc
I= 100, G = 200, Ca = 100, Xn=-100, mpc = 3/4](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8fd71a05-cce6-42ce-8872-636d0d92cbc9%2F7dfb788f-e6d3-4a68-85c9-bc313fa77f3e%2F4tc7uj7_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Q=AE,
Q
AQ
1
=
-
AE =C+I+G + Xn,
1
m pc
C = Ca + mpc Q
(C₁ + I + G + X ₁ )
a
n
·A (C ₂ + I + G + X ₁ )
a
n
1 m pc
I= 100, G = 200, Ca = 100, Xn=-100, mpc = 3/4
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