Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Chapter 24, Problem 1.7P
Subpart (a):
To determine
Equilibrium.
Subpart (b):
To determine
Equilibrium.
Subpart (c):
To determine
Equilibrium.
Subpart (d):
To determine
Equilibrium.
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In the country of Borealis, the minimum amount of consumption spending that will occur is $300
- that is, no matter what level of income households have, the aggregate amount of consumption
spending in the economy will be at least $300. In addition, for every extra dollar of national
income, consumption spending will increase by $0.75.
The following are exogenous (not directly affected by income):
G = 9
I = 14
X = M = 0
The consumption function is:
C = k + cY, where k = 8, c = 0.6
at the point where this economy is in equilibrium what is the total level of withdrawals? Give the number to ONE decimal place.
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Y = C + I0 + G , C = a + b ( Y – T) , G = g Y
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Chapter 24 Solutions
Principles of Economics (12th Edition)
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