) Keynesian macroeconomic model with a single-time period lag on the consumption function described is initially equilibrium with the level of investment I = 500 Y₁ = C₁ + It Ct = 750+ 0.5Y-1 a) Determine the equilibrium level of income Y* b) Suppose now the level of investment is increased to I = 650 in one period and reverts to the initial level in subsequent periods. What is the level of income in the period when investment is distributed? Find the time period What is the level of the twelfth period, Yt=12? i. ii. iii.

) Keynesian macroeconomic model with a single-time period lag on the consumption function described is initially equilibrium with the level of investment I = 500 Y₁ = C₁ + It Ct = 750+ 0.5Y-1 a) Determine the equilibrium level of income Y* b) Suppose now the level of investment is increased to I = 650 in one period and reverts to the initial level in subsequent periods. What is the level of income in the period when investment is distributed? Find the time period What is the level of the twelfth period, Yt=12? i. ii. iii.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter9: Aggregate Expenditures

Section: Chapter Questions

Problem 12E

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