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Y - 0.8 Y = 50 + 50. => 0.2 Y = 100. => Y = 100/ 0.2 = 500 crores. (b) Level of consumption at equilibrium income of 500 crores. C=50 + 0.8 ( 500).
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a) Equilibrium level of income is reached when Y = AE and since AE = C + I when there is no govrnment sector, then: AE = C + I = 100 + 0.8Y + 50 = 150 + 0.8 ...
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S = -125 + 0.25(Y – 100) = -150 + 0.25Y. (b) C = 0.80(300-T+Y). Net Taxes = 50. = 240 – 0.8(T – Y) = 240 + 0.8(Y – T). Autonomous Consumption Level.
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Aggregate demand, or total spending, is simply C + I + G. Evaluate C by plugging Y = 1100 into the consumption equation: C = 100 + 0.8Y = 100 + 0.8(1100) = 100 ...
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Consider the following simple economy with no government and foreign sectors. Consumption function: C=100+0.8Y Investment: I=50 a) What is the equilibrium level ...
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Therefore, multiply the change in government spending. (as that is going to affect demand directly) by the multiplier to get 2.5(−40) = −100. Therefore, Y ...
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Yd = Y- T, where Y is national income (or GDP) and T = Tax Revenues ... Y=AE=C+I+G+X−M=$20+0.9(Y−T)+$70+$80+$50−0.2(Y−T)=$220+0.0(Y−T)−0.2(Y−T) Y ...
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21 thg 1, 2022 · (2 Marks). Answer. Given Consumption function is,. C=100+0.8 Y. Autonomous Investments=500 crores. We know, at equilibrium level. Y=C+I Y.
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C= 120 + 0.5 (Y - T). I = 40. G=20. T= 40. 1. Solve for the equilibrium level of output in this economy. Solution: The aggregate demand of this economy is ...
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Suppose the consumption function is given by C = 100+ 0.8Y, while investment is given by I = 50. a) What is the equilibrium level of income? b) What is the ...
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Y = 200 + 0.25Y – 50 + 150 + 0.25Y – 1000i + 250 ... (c) We are now asked to use our answers from (b) to find values for C ... i = Y/4000 – 23/100.
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c) increase consumption by $105 million. d) decrease consumption by $950 million. 12. If an increase in autonomous expenditure of $10 million results in a $50 ...
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A. Therefore, C = $100+0.9DI where DI = Y-Tx DI - disposable income, Y - real GDP ... A(r) = a(r)+I(r)+G+X-IM-mpcTx = 100-5r + 200-10r +100+200-175-0.8(50)
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