The following is a consumption function along with the other components of GDP. Suppose the following: Y=C+I+G+NE where
Posted: Wed Apr 27, 2022 12:25 pm
The following is a consumption function along with the other components of GDP.
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 (I) = 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)
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 (I) = 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)