Question
Consider an economy (with no government) where: C = 150+0.8Y I0= 2850 X0= 1400 M = 400+0.3Y a.Solve for Y*. b.Draw an aggregate expenditure (AE-Y)
Consider an economy (with no government) where:
C = 150+0.8Y
I0= 2850
X0= 1400
M = 400+0.3Y
a.Solve for Y*.
b.Draw an aggregate expenditure (AE-Y) graph. On your graph, include both the intercept and the slope of the AE function.
c. On your graph from (b), demonstrate the change that would occur in the marginal propensity to import (mpm) increased.
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The American Economy
Authors: Walter Greason, William Gorman
1st Edition
1524902675, 9781524902674
