An economy has the following consumption function: C=200+0.8DI The government budget is balanced, with government purchases and taxes both fixed at $1,000. Net exports are$100. Investment is $600. Find equilibrium GDP. What is the multiplier for this economy? 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?Find the equilibrium level of GDP demanded in an economy in which investment is $250, net exports are zero, government purchases and taxes are both $400, and the consumption function is as follows:C=250+0.5DI
This question was answered on: Sep 21, 2023
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