Suppose structural equations for an open economy are given as follows. C = 50 + b( Y
Question:
Suppose structural equations for an open economy are given as follows.
C = 50 + b( Y – 50 – tY)
I = 100 G = 50 T = 50 X = 10 M = 5 + 0.1 Y b = 0.8 t = 0.20 Find (
a) national income at equilibrium, (
b) foreign trade multiplier if Δ X = 5 and (
c) M and T at equilibrium level of income.
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