This question repeats the exercise of Study Exercise 12, but for spe- cific numerical values. The equations of the model are C = 50+0.7YD T = (0.2)Y I = G 75 X = 50 100 IM = (0.15)Y a. Compute the AE function and plot it in a diagram. What is to- tal autonomous expenditure? b. What is the slope of the AE function? c. Compute the equilibrium level of national income. d. Suppose X rises from 50 to 100. How does this affect the level of national income? e. What is the simple multiplier in this model?

This question repeats the exercise of Study Exercise 12, but for spe- cific numerical values. The equations of the model are C = 50+0.7YD T = (0.2)Y I = G 75 X = 50 100 IM = (0.15)Y a. Compute the AE function and plot it in a diagram. What is to- tal autonomous expenditure? b. What is the slope of the AE function? c. Compute the equilibrium level of national income. d. Suppose X rises from 50 to 100. How does this affect the level of national income? e. What is the simple multiplier in this model?

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter1: Introducing The Economic Way Of Thinking

Section1.A: Applying Graphs To Economics

Problem 2SQP

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