Question
Considering a small closed economy without government, investment expenditures are 180 billion dollars where consumption function is C=120+0.75Y a) Explain it meaning of autonomous expenditure
Considering a small closed economy without government, investment expenditures are 180 billion dollars where consumption function is C=120+0.75Y
a) Explain it meaning of autonomous expenditure in an economy (3points)
b) how much is autonomous expenditures in this economy?
c) what is the equilibrium level of income
d) calculate the multiplier
e)if the investment expenditures decrease by 30 billion dollar, what would be the change in income level
f) what is the level of saving in equilibrium
g) how much is the new equilibrium income after the change is imposed in part e
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started