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Answer the questions below based on the following economy: C = 4,500 + 0.25( Y - T ) I = I 0 = 2,000 G
Answer the questions below based on the following economy:
C= 4,500 + 0.25(Y-T)
I=I0= 2,000
G=G0= 2,500
X= 800
IM= 400
T=T0= 2,000
Yp= 12,000
a)Find autonomous expenditure.
b)Find the multiplier.
c)Find short-run equilibrium output.
d)Find the output gap.
e)By how much would autonomous expenditure have to change to eliminate the output gap? and will it increase or decrease?
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