Question
Suppose a structural model of a three sector economy is given as follows: C = 200 + 0.8 (Y-T) I = Rs 100 million G
Suppose a structural model of a three sector economy is given as follows:
C = 200 + 0.8 (Y-T)
I = Rs 100 million
G = Rs 150 million
T = 50 + 0.2Y
Find:
a) National Income Equilibrium. b) What happens to the national income if government expenditure decreased to Rs 100 million and investment increased to Rs 150 million
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Economics Principles and Policy
Authors: William J. Baumol, Alan S. Blinder
12th edition
978-0538453677, 538453672, 978-0538453622, 538453621, 978-0538453653
