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For questions 1 through 3, suppose that a Keynesian economy presents the following parameter values: A = 200; mpc = 0.7; t = 0.3; TR
For questions 1 through 3, suppose that a Keynesian economy presents the following parameter values: A = 200; mpc = 0.7; t = 0.3; TR = 100; I = 80; G = 180; X = 80; M = 110. 1. This economy's equilibrium output (YEQ) is approximately (a) 980.39 (b) 1039.22 (c) 1020.41 (d) 1098.04 2. If autonomous consumption (A) falls by 50, then the resulting equilibrium output would be: (a) 941.18 (b) 918.37 (c) 1000 (d) 882.35 3. If investment (I) rises by 75 while at the same time, net exports (NX) falls by 50, then the new equilibrium output resulting from those shocks would be (assume this question is independent of question 2): (a) 1070 (b) 1088.24 (c) 1029.41 (d) 1071.42
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