Macroeconomics 12th Edition by Rudiger Dornbusch, Stanley Fischer ,Richard Startz

تمرين 7

Here we investigate a particular example of the model studied in Sections 10-2 and 10-3 with no government. Suppose the consumption function is given by C = 100 +.8 Y , whereas investment is given by I = 50.
a. What is the equilibrium level of income in this case
b. What is the level of saving in equilibrium
c. If, for some reason, output is at the level of 800, what will the level of involuntary inventory accumulation be
d. If I rises to 100 (we discuss what determines I in later chapters), what will the effect be on the equilibrium income
e. What is the value of the multiplier, a, here
f. Draw a diagram indicating the equilibria in both parts a and d.