In Econland,autonomous consumption equals 200,the marginal propensity to consume equals 0.9,net taxes are equal to 100,planned private-sector investment is equal to 200,government purchases are equal to 300,and net exports are equal to 50.Short-run equilibrium output in this economy equals

Question

Quizplus · Accepted Answer

The equation for calculating short-run equilibrium output in the economy is:

Y = C + I + G + NX

Where Y is output, C is consumption, I is investment, G is government spending, and NX is net exports.

Plugging in the given values, we get:

Y = 200 + 0.9Y - 90 + 200 + 300 + 50

Simplifying and solving for Y, we get:

Y = 6,600

Therefore, the answer is C.

In Econland,autonomous Consumption Equals 200,the Marginal Propensity to Consume Equals