Homework Answers
Answer:
(a) AE = C + I + G + NX
AE = 750 + 0.50Y + 2000 + 1500 - 100
AE = 4150 + 0.50Y
(b) Unplanned change in inventories = GDP (Y) – AE
Therefore:
|
GDP(Y) |
AE($) |
Unplanned change in inventories($) |
|
$4,350 |
4150 + 0.50Y = 4150 + 0.50(4350) = 6,325 |
4,350 – 6,325 = -1,975 |
|
$13,050 |
4150 + 0.50Y = 4150 + 0.50(13,050) = 10,675 |
13,050 – 10,675 = 2,375 |
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