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Answer the questions below based on the following economy: C = 2,500 + 0.5( Y - T ) I = I 0 = 1,000 G
Answer the questions below based on the following economy:
C= 2,500 + 0.5(Y-T)
I=I0= 1,000 G=G0= 1,500 X= 600 IM= 400 T=T0= 1,000 Yp= 11,000
Note:Keep as much precision as possible during your calculations. Your final answer should be accurate to at least two decimal places.
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?
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