Activity 1

The following equations describe consumption. investment, government spending, taxes. and net exports in the country of Economika. 6:400 + 0.75lY- T) | = 400 G = 450 T = 450 X = 100 In Economika. equilibrium GDP ls equal to $3. (Reund year asnwer the nearest dollar.) If real GDP In Economlka is currently $5,050. which of the following is true? 0 A. There will be an unplanned decrease in inventories, and real GDP will increase next period. 0 B. There will be an unplanned increase in inventories, and real GDP will increase next period. 0 C. There will be an unplanned decrease in inventories, and real GDP will decrease next period. 0 D. There will he an unplanned increase in inventories, and real GDP will decrease next period. 0 E. There will be no unplanned change in inventories, and real GDP will stay the same next period. Click on the icon below to view the market for investment funds. Use this diagram to add autonomous investment spending to the simple Keynesian model of the economy shown to the right. W On the diagram to the right, draw the following 1.) Using the line drawing tool, draw the planned investment expenditure curve. Label it 'T'. 2.) Using the line drawing tool, draw the new expenditure function representing consumption and investment. Label it 'C+l'. 3.) Using the point drawing tool, indicate the new equilibrium level of real GDP. Label it 'B'. Carefully follow the instructions above, and only draw the required objects.