Refer to the above diagram where Ig is gross Investment, X is exports, G is government purchases, S and Sa are saving before and after taxes respectively, M is Imports, and T is net axes, that is, taxes less transfers. The equilibrium level of GDP for this economy is:

Refer to the above diagram where Ig is gross Investment, X is exports, G is government purchases, S and Sa are saving before and after taxes respectively, M is Imports, and T is net axes, that is, taxes less transfers. The equilibrium level of GDP for this economy is:

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

S
0
Y₁ Y 2 Y3 Y ₁
Multiple Choice
Y3-
S₂+M+T
'S+M
Refer to the above diagram where Ig is gross Investment, X is exports, G is government
purchases, S and Sa are saving before and after taxes respectively, M is Imports, and T is net
taxes, that is, taxes less transfers. The equilibrium level of GDP for this economy is:
Y4-
-Ig+X+G
-Ig+x
GDP=NI

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Assume the following to answer the following question: C= 1000+ .9 (Y-T) Tax rate = 0.1Y Imports = 0.1(Y-T) Government spending = 200 Investment = 300 Exports = 600 Potential Output = $8000 What is the current GDP in this economy?