Order the answer to: Assume that the consumption schedule for a private open economy

Order the answer to: Assume that the consumption schedule…

Question	Assume that the consumption schedule for a private open economy is such that consumption C = 50 + 0.8Y. Assume further that planned investment Ig and net exports X n are independent of the level of real GDP and constant at I g = 30 and Xn = 10. Recall also that, in equilibrium, the real output produced (Y) is equal to aggregate expenditures: Y = C + Ig + Xn. a. Calculate the equilibrium level of income or real GDP for this economy. b. What happens to equilibrium Y if Ig changes to 10? What does this outcome reveal about the size of the multiplier?
Subject	business-economics

Question

Assume that the consumption schedule for a private open economy is such that consumption C = 50 + 0.8Y. Assume further that planned investment Ig and net exports X n are independent of the level of real GDP and constant at I g = 30 and Xn = 10. Recall also that, in equilibrium, the real output produced (Y) is equal to aggregate expenditures: Y = C + Ig + Xn. a. Calculate the equilibrium level of income or real GDP for this economy. b. What happens to equilibrium Y if Ig changes to 10? What does this outcome reveal about the size of the multiplier?

Subject

business-economics

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