11 An economy has the following consumption function:
C=200 + 0.8 DI
The government budget is balanced, with government purchases and taxes both fixed at $1,000. Net exports are $100. Investment is $600.
1)Find equilibrium GDP.(1 point)
2)What is the multiplier for this economy?(1 point)
3)If G rises by $100, what happens to Y? What happens to Y if both G and T rise by $100 at the same time?(1 point)
This question was answered on: May 23, 2022
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