The Aggregate Expenditure Model has been parameterized as follows: Y = C + I + G + NX The equilibrium condition C = 2000

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The Aggregate Expenditure Model Has Been Parameterized As Follows Y C I G Nx The Equilibrium Condition C 2000 1 (91.82 KiB) Viewed 32 times

The Aggregate Expenditure Model has been parameterized as follows: Y = C + I + G + NX The equilibrium condition C = 2000 +.80(Y-T) The consumption function I = 3,000 The planned investment function (exogenous) G = 3,000 Government purchases (exogenous) T = .20Y The tax function NX = 700-.18 The 'net export' function 10. Modify the above model to reflect an economy operating with government expenditure equal to government tax revenue (i.e. a balanced budget) and then: a. Find the macroeconomic equilibrium level of GDP/Aggregate Expenditure (Y) b. Find the macroeconomic equilibrium level of consumption expenditure C. Find the macroeconomic equilibrium level of tax revenue d. Find the macroeconomic equilibrium level of net exports