Question
Use the following macroeconomic model to answer the questions from. You must show your work of...
Use the following macroeconomic model to answer the questions from. You must show your work of estimation to obtain the credits.
C = 50 + 0.80Yd; C = consumption function; Yd = disposable income (Y-T)
T = 30; T = Tax revenue
I = 100; I = Investment
G = 150; G = Government expenditure
Yf = Full Employment RGDP (Potential RGDP) = 1600
1. Estimate the equilibrium GDP level (income).
2. At the equilibrium level of output you estimated for Q1 above, estimate the aggregate consumption level
3. At the equilibrium level of output you estimated for Q1 above, estimate the aggregate saving level.
Homework Answers
Answer #1
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