Assume:
C = 40 + 0.8(Y - T)
G = 10
I = 20
T = 0, where T are taxes.
(a) Calculate Y at equilibrium.
(b) Calculate C, I, and G at equilibrium.
(c) Now assume,
EX = 5 + 4EP /P
IM = 10 + 0.1 (Y - T) - 3EP /P
E = 3
P = 1.5
P = 2
Find equilibrium Y.

Question

Assume:
C = 40 + 0.8(Y - T)
G = 10
I = 20
T = 0, where T are taxes.
(a) Calculate Y at equilibrium.
(b) Calculate C, I, and G at equilibrium.
(c) Now assume,
EX = 5 + 4EP  /P
IM = 10 + 0.1 (Y - T) - 3EP  /P
E = 3
P  = 1.5
P = 2
Find equilibrium Y.

Quizplus · Accepted Answer

The Answer of Assume:
C = 40 + 0.8(Y - T)
G = 10
I = 20
T = 0, where T are taxes.
(a) Calculate Y at equilibrium.
(b) Calculate C, I, and G at equilibrium.
(c) Now assume,
EX = 5 + 4EP  /P
IM = 10 + 0.1 (Y - T) - 3EP  /P
E = 3
P  = 1.5
P = 2
Find equilibrium Y.

Assume: C = 40 + 0.8(Y - T)