Q3 In a simple macroeconomic model, the value of national income Y may be found by solving the system: G= 250 (government expenditure) T= 50 (taxation) I= 100 (planned investment) C = 0.75Yd + 150 (consumption) where disposable income Yd = Y - T. (a) Calculate the equilibrium level of national income. (b) Calculate the total increase in government expenditure and investment needed to increase the equilibrium level of national income by 20.

Q3 In a simple macroeconomic model, the value of national income Y may be found by solving the system: G= 250 (government expenditure) T= 50 (taxation) I= 100 (planned investment) C = 0.75Yd + 150 (consumption) where disposable income Yd = Y - T. (a) Calculate the equilibrium level of national income. (b) Calculate the total increase in government expenditure and investment needed to increase the equilibrium level of national income by 20.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Production And Growth

Section: Chapter Questions

Problem 5CQQ

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