Suppose that the level of Government expenditure increases to G = 200. What is the equilibrium value of aggregate income, Y ? (Note: you will no longer get a round number for Y .)

C(Yd) = 58 + 0.6 Yd

I(r) = 52 ? 0.2 r

G = 180

t = 0.4 (represents 40%)

AutoSave 9 v VD Econ Assignment 2 Saved to my Mac Q 8,9 Home Insert Draw Design Layout References Mailings Review View Grammarly 9 Tell me |_' Share Cl Comments an . A V L v Times New.,, v 12 v A A As v 1% AaBchDdE AthCchE- Aa BchDc AaBchDd Ez Aa B b( > M 0 g \"5'9 B I U v ab x x1 A v v A v Normal No Spacing Heading1 Heading 2 Title Styles Dictate Editor Open v '7 pas\"! v 7 v p v A v Normal N0 Spacing Headingi Heading 2 Title Styles Dictate Editor Open 6 B I Q ab X2 X A ~ Pane Grammarly 4. Suppose that the price level (P) is 20. What is the equilibrium value of aggregate income, Y ? (Hint: use the AD equation.) P=20 20= 40.4Y+29000 40.4Y=28980 Y=28980l40.4 Y=717.33 5. What are the equilibrium values of the interest rate, r, and investment, I? (Hint: use the MP R or IS, and l(r) equations.) Y= 717.33 r = 1450 - 2Y r : 1450 1434.66 r = 15.34 = 15.34% 105.34) = 23.07 - 0.20534) {(1534) : 23.07 3.07 [(15.34) = 20 6. Suppose that the level of Government expenditure increases to G = 200. What is the equilibrium value of aggregate income, Y ? (Note: you will no longer get a round number for Y .) 7. What are the new equilibrium values of the interest rate, r, and investment, I? Page 2 of 2 465 words {I} English (New Zealand) Accessibility: Good to go : 1 Focus + 134%