T. Haavelmo devised a model of the US economy for the years 1929–1941 based on the following equations: (i) c = 0.712y + 95.05 (ii) s = 0.158(c + x) − 34.30 (iii) y = c + x − s (iv) x = 93.53 Here x denotes total investment, y is disposable income, s is the total saving by firms, and c is total consumption. Write the system of equations in the form (1) when the variables appear in the order x, y, s, and c. Then find the solution of the system.
T. Haavelmo devised a model of the US economy for the years 1929–1941 based on the following equations: (i) c = 0.712y + 95.05 (ii) s = 0.158(c + x) − 34.30 (iii) y = c + x − s (iv) x = 93.53 Here x denotes total investment, y is disposable income, s is the total saving by firms, and c is total consumption. Write the system of equations in the form (1) when the variables appear in the order x, y, s, and c. Then find the solution of the system.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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T. Haavelmo devised a model of the US economy for the years 1929–1941 based on the following
equations:
(i) c = 0.712y + 95.05 (ii) s = 0.158(c + x) − 34.30
(iii) y = c + x − s (iv) x = 93.53
Here x denotes total investment, y is disposable income, s is the total saving by firms, and c is
total consumption. Write the system of equations in the form (1) when the variables appear in
the order x, y, s, and c. Then find the solution of the system.
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