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QUESTION ONE: YOU ARE GIVEN THE FOLLOWING FUNCTIONS THAT PREVAILS IN AN HYPOTHICAL ECONOMY: 1. C= 100+.70(Yd). 2. lo= 200 3. Go= 250 4. T= 50+0.10(y). 5. Xo=100 6. M=120+0.03(Y). Based on the previous data find the following: 1- Solve for equilibrium income(output). 2- Test and apply equilibrium conditions. 3- If potential output is=500 what kind of gap exists or occurs in this economy. 4- What is the amount of gap. 5- What kind of policy should be conducted to close the gap. 6- Use balanced budget multiplier to close the gap. EXPLAIN THE FOLLOWING:

QUESTION ONE: YOU ARE GIVEN THE FOLLOWING FUNCTIONS THAT PREVAILS IN AN HYPOTHICAL ECONOMY: 1. C= 100+.70(Yd). 2. lo= 200 3. Go= 250 4. T= 50+0.10(y). 5. Xo=100 6. M=120+0.03(Y). Based on the previous data find the following: 1- Solve for equilibrium income(output). 2- Test and apply equilibrium conditions. 3- If potential output is=500 what kind of gap exists or occurs in this economy. 4- What is the amount of gap. 5- What kind of policy should be conducted to close the gap. 6- Use balanced budget multiplier to close the gap. EXPLAIN THE FOLLOWING:

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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QUESTION ONE: YOU ARE GIVEN THE FOLLOWING FUNCTIONS THAT PREVAILS IN AN HYPOTHICAL ECONOMY: 1. C= 100+.70(Yd). 2. lo= 200 3. Go= 250 4. T= 50+0.10(y). 5. Xo=100 6. M=120+0.03(Y). Based on the previous data find the following: 1- Solve for equilibrium income(output). 2- Test and apply equilibrium conditions. 3- If potential output is=500 what kind of gap exists or occurs in this economy. 4- What is the amount of gap. 5- What kind of policy should be conducted to close the gap. 6- Use balanced budget multiplier to close the gap. EXPLAIN THE FOLLOWING:
Transcribed Image Text:QUESTION ONE: YOU ARE GIVEN THE FOLLOWING FUNCTIONS THAT PREVAILS IN AN HYPOTHICAL ECONOMY: 1. C= 100+.70(Yd). 2. lo= 200 3. Go= 250 4. T= 50+0.10(y). 5. Xo=100 6. M=120+0.03(Y). Based on the previous data find the following: 1- Solve for equilibrium income(output). 2- Test and apply equilibrium conditions. 3- If potential output is=500 what kind of gap exists or occurs in this economy. 4- What is the amount of gap. 5- What kind of policy should be conducted to close the gap. 6- Use balanced budget multiplier to close the gap. EXPLAIN THE FOLLOWING:
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