Homework Answers
(Question 1)
C = 100 + 0.75 x (Y - T) = 100 + 0.75 x (2500 - 50) = 100 + 0.75 x 2450 = 100 + 1837.5 = 1937.5
Y = C + I + G
2500 = 1937.5 + I + 500
2500 = 2437.5 + I
I = 62.5 ~ 63
(Question 2)
Y = C - T + I + G
Y - C = I - (T - G)
S = I - (T - G)
100 = 500 - (T - G)
T - G = Government budget surplus = 400
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