ADVANCED ANALYSIS Assume that the consumption schedule for a private open economy is such that consumption is:
$$ C=80+0.8 Y $$
Assume further that planned investment \(I_{g}\) and net exports \(X_{n}\) are independent of the level of real GDP and constant at \(I_{g}=50\) and \(X_{n}\) \(=10 .\) Recall also that, in equilibrium, the real output produced \((Y)\) is equal to aggregate expenditures:
$$ Y=C+I_{g}+X_{n} $$
Instructions: Round your answers to the nearest whole number.
a. What is the equilibrium level of income or real GDP for this economy?
Equilibrium GDP \((Y)=\$ \mathrm{~ प ् u m}\)
b. What happens to equilibrium \(Y\) if \(I_{g}\) changes to \(30 ?\)
Equilibrium GDP \((Y)=\$ \square \quad 600\)
What does this outcome reveal about the size of the spending multiplier?
Spending multiplier =
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Assume that the consumption schedule for a private open economy is such that consumption is
ADVANCED ANALYSIS Assume that the consumption schedule for a private open economy is such that consumption...
ADVANCED ANALYSIS Assume that the consumption schedule for a private open economy is such that consumption is:C = 100+ 0.8Y Assume further that planned investment lo and net exports Xn are independent of the level of real GDP and constant at lg = 60 and Xn = 10. Government spending (G) is equal to $0. Recall also that, in equilibrium, the real output produced (y) is equal to aggregate expenditures: Y=C+Ig+G+Xn nstructions: Round your answers to the nearest whole number. a. What is the...
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The table below shows the annual consumption expenditure (C) and output (Y) for a developing nation....
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ADVANCED ANALYSIS Assume that the consumption schedule for a private open economy is such that consumption is:C = 100+ 0.8Y Assume further that planned investment lo and net exports Xn are independent of the level of real GDP and constant at lg = 60 and Xn = 10. Government spending (G) is equal to $0. Recall also that, in equilibrium, the real output produced (y) is equal to aggregate expenditures: Y=C+Ig+G+Xn nstructions: Round your answers to the nearest whole number. a. What is the...
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