Question

Instruction: Please submit the assignment in A4 size paper with clear and neat writing. The due date is on Thursday 13/2/2020 at the beginning of the class. Any late submission will deduct points. Questions Given the following system equations: C= 30 +0.5Yd, 1 =400, G=500, T=200 +0.3Y 1. Find the equilibrium output Y* 2. Find the value of consumption in the equilibrium Cº?! 3. Find the value of saving in equilibrium (Sº)? 4. Draw the production curve and the demand curve and equilibrium point in a diagram? 5. Suppose the government increase spending to 600, what is the effect on equilibrium? Show the change in your diagram.

Answer 1

- Y = c + I + G PS Y = 3040.54 + Yoo 500 Y = = 30 +0.5 (Y-T + 900 930 t o.5 (Y - 200 -0.37) Y = 130 to. 5c0.7Y -2.00) Y = root 0.35Y Y-0. 35 Y = toso 832 A 0.65Y = 1830 830 0.65 Y = 1276.92

= 1276.92 a C = 30 +0.5 CY-T) cod = 0 ( = 30 + 0.5(4-200-0.3%) ' - 30 t 0.5(0.78 -200J EP. x = 30 + 0.35Y - 100 2 = 0.35% - 70 ♡ = 376.92 aso

Ecter doc se YĆ 8 = 1276.92 5 = 900 376.72

Production curve = Demond Curve = cctI4G = 830 to 0.357 Aggergait ctite Expenditur 1276.82 1276.12 Output

o scara 1276.82 Oulu If = 600 CT - co to Y = 930 to. BSY ) =a + y* = 930 1430.76