This question repeats the exercise of Study Exercise 12, but for spe- cific numerical values. The equations of the model are C = 50+0.7YD T = (0.2)Y I = G 75 X = 50 100 IM = (0.15)Y a. Compute the AE function and plot it in a diagram. What is to- tal autonomous expenditure? b. What is the slope of the AE function? c. Compute the equilibrium level of national income. d. Suppose X rises from 50 to 100. How does this affect the level of national income? e. What is the simple multiplier in this model?

This question repeats the exercise of Study Exercise 12, but for spe- cific numerical values. The equations of the model are C = 50+0.7YD T = (0.2)Y I = G 75 X = 50 100 IM = (0.15)Y a. Compute the AE function and plot it in a diagram. What is to- tal autonomous expenditure? b. What is the slope of the AE function? c. Compute the equilibrium level of national income. d. Suppose X rises from 50 to 100. How does this affect the level of national income? e. What is the simple multiplier in this model?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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