Consumption:C = 80 + .75Y^d

Investment:I = 140

Government:G = 200

Exports:X = 210

Imports:M = .30Y

Taxes:T = .20Y

DisposableIncome:Y^d= Y - T

a.Calculate the equilibrium income, Y^e, for this economy.

b.What is the size of the government deficit or surplus?Trade balance?

c.Calculate the effect on equilibrium income, Y^e, if government spending increases by $15.

For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac).