Suppose the following: Y=C+I+G+NE where C is the consumption function with the following form: C=500+.40(Y-T), If invest

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Suppose The Following Y C I G Ne Where C Is The Consumption Function With The Following Form C 500 40 Y T If Invest 1 (65.88 KiB) Viewed 34 times

Suppose the following: Y=C+I+G+NE where C is the consumption function with the following form: C=500+.40(Y-T), If investments (1) = 200, Taxes (T) are 0, NE is equal to 0, and government spending is 100 what is the equilibrium rate of the economy? Please show your work. (2) = Suppose the government increases taxes by 100 units how will that change the equilibrium (re-calculate and tell me the new equilibrium) ?(1) Suppose the economy has a economy is at the income level of 900 (Y=900). how much will be consumed? saved? Will the economy income increase or decrease overtime? (2)