Answered step by step
Verified Expert Solution
Question
1 Approved Answer
1. a) Given the variables below fill out the cells in table 1. Include the formulas where required. Variables Autonomous Consumption (c) = 50 Desired
1. a) Given the variables below fill out the cells in table 1. Include the formulas where required. Variables Autonomous Consumption (c) = 50 Desired Investment (1) = 150 Desired Government Purchases (G) = 175 Desired Exports (X) = 125 Marginal Propensity to Consume (MPC) = 0.8 Marginal Propensity to Import (m) = 0.3 Tax rate (t) = 0.2 Table 1 Actual Desired Desired National Autonomous Desired Desired Government Desired Desired Aggregate Income (Y) Consumption Consumption Investment Purchases Exports Imports Expenditure Formula => 0 150 + 300 450 600 750 900 1050 + K y b) Given the information above, calculate the equilibrium level of Desired Aggregate Expenditures / National Income. Show your work. c) Describe where the equilibrium would appear on Figure 1 below
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started