Suppose C = 40 + 0.8YD, T = 50, I = 60, G = 40, X = 90, M = 50 + 0.05Y

1.	Suppose C = 40 + 0.8YD, T = 50, I = 60, G = 40, X = 90, M = 50 + 0.05Y (i) Find equilibrium income. (ii) Find the net export balance at equilibrium income. (iii) What happens to equilibrium income and the net export balance when the government purchases increases from 40 to 50?
Answer» Suppose C = 40 + 0.8YD, T = 50, I = 60, G = 40, X = 90, M = 50 + 0.05Y (i) Find equilibrium income. (ii) Find the net export balance at equilibrium income. (iii) What happens to equilibrium income and the net export balance when the government purchases increases from 40 to 50?

Suppose C = 40 + 0.8YD, T = 50, I = 60, G = 40, X = 90, M = 50 + 0.05Y (i) Find equilibrium income. (ii) Find the net export balance at equilibrium income. (iii) What happens to equilibrium income and the net export balance when the government purchases increases from 40 to 50?

Answer»

(i) Find equilibrium income.

(ii) Find the net export balance at equilibrium income.

(iii) What happens to equilibrium income and the net export balance when the government purchases increases from 40 to 50?