Question
Consider a closed economy described with a Keynesian cross. The consumption is C = 500 + .75 (Y T). Planned investment is 400, government
Consider a closed economy described with a Keynesian cross. The consumption is C = 500 + .75 (Y – T). Planned investment is 400, government spending is 300, and taxes are 300.
1. If Y is 2000, what is the planned expenditure? How is inventory changing (accumulating or not accumulating)?
2. b. What is Y equilibrium?
3. What is equilibrium consumption, private savings, public savings, and national savings?
4. How much does equilibrium income decrease when G is reduced to 200? What is the public spending multiplier?
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C 500 075 Y T I 400 G300 T300 1 Planned spending C I G 500 075 Y300 400 300 Pla...
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Macroeconomics
Authors: Andrew B. Abel, Ben S. Bernanke, Dean Croushore, Ronald D. Kneebone
6th Canadian Edition
321675606, 978-0321675606
