Problem 2: Consider the following National Income determination model: Y=C+I0+G0 C=500+0.75(Y−T) T=200+0.2Y,I0=2500,G0=1500 The system of equations can be expressed as Y−C=4000 −0.75Y+C+0.75T=500 −0.2Y+T=200 Solve this system of equations using both the inverse method and the Cramer's rule to find the equilibrium values of Y, C, and T.
Problem 2: Consider the following National Income determination model: Y=C+I0+G0 C=500+0.75(Y−T) T=200+0.2Y,I0=2500,G0=1500 The system of equations can be expressed as Y−C=4000 −0.75Y+C+0.75T=500 −0.2Y+T=200 Solve this system of equations using both the inverse method and the Cramer's rule to find the equilibrium values of Y, C, and T.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Problem 2: Consider the following
Y=C+I0+G0
C=500+0.75(Y−T)
T=200+0.2Y,I0=2500,G0=1500
The system of equations can be expressed as
Y−C=4000
−0.75Y+C+0.75T=500
−0.2Y+T=200
Solve this system of equations using both the inverse method and the Cramer's rule to find the equilibrium values of Y, C, and T.
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