Question 2 An open economy is described by the following system of macroeconomic equations, in which all macroeconomic aggregates are measured in billions of Namibian dollars, NS. Y=C+1+G+X -M C- 10 + 0.2Y T= 30 + 0.2Y TR= 80 -0.05Y I-35 G= 15 E- 80 M= 22 + 0.1Y, Yis domestic income Ya is private disposable income Cis aggregate consumption spending where: Tis government tax revenue TR is transfer payments lis investment spending Gis government spending E represents exports M represents imports of goods and services. (a) Determine the equilibrium level of income /output. (b) illustrate the aggregate expenditure curve and equilibrium income on a diagram. (e) Determine the surplus/deficit in the government budget at equilibrium.

Question 2 An open economy is described by the following system of macroeconomic equations, in which all macroeconomic aggregates are measured in billions of Namibian dollars, NS. Y=C+1+G+X -M C- 10 + 0.2Y T= 30 + 0.2Y TR= 80 -0.05Y I-35 G= 15 E- 80 M= 22 + 0.1Y, Yis domestic income Ya is private disposable income Cis aggregate consumption spending where: Tis government tax revenue TR is transfer payments lis investment spending Gis government spending E represents exports M represents imports of goods and services. (a) Determine the equilibrium level of income /output. (b) illustrate the aggregate expenditure curve and equilibrium income on a diagram. (e) Determine the surplus/deficit in the government budget at equilibrium.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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