Recall also that in equilibrium the real output produced y, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Microeconomics Expert

Economics

Basic Economics

Business Economics

International Economics

Managerial Economics

Public Economics

Home >> Microeconomics

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 Xn are independent of the level of real GDP and constant at Ig = 30 and Xn = 10. Recall also that, in equilibrium, the real output produced (Y) is equal to aggregate expenditures: Y = C + Ig+ Xn.

a. find out 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?

View complete question

Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M970074

Have any Question?Write your Review or question?

Related Questions in Microeconomics

Question hypothesis testing z tests olae oil beauty lotion

Question: Hypothesis Testing: z Tests. Olae Oil Beauty Lotion is a skin moisturizing product that contains rich oils, blended especially for overly dry or neglected skin. The product is sold in 5-ounce bottles by a wide ...

Question in emerging markets such as india consumers shop

Question: In emerging markets such as India, consumers shop far more frequently than in most Western countries, often daily. As a result, consumers there have many more chances to switch brands. What does this buying beh ...

Question assume that the value of the currency of country j

Question: Assume that the value of the currency of country J rises by 10% one year. Its price elasticity of imports is -0.6 and its price elasticity of exports is -0.7. Imports of raw materials and parts account for 30% ...

Question you can buy a crane for 100000 that will bring an

Question: You can buy a crane for $100,000 that will bring an annual income of $20,000 in year-0 dollars. The service life of the equipment is 10 years and it will be depreciated using straight line method with a salvage ...

Question analyze the nominal and real concepts and apply

Question: Analyze the nominal and real concepts, and apply these concepts to Gross Domestic Product (GDP). Determine the elements that affect the reporting of the GDP. Compare and contrast the reporting of GDP in nominal ...

Question consider a welfare program in which individuals

Question: Consider a welfare program in which individuals who do not earn any income receive $100 in benefits but benefits decrease with earned income: for each dollar earned 50 cents of benefits are withdrawn and this i ...

Question the bank of canada defines the canadian money

Question: The Bank of Canada defines the Canadian money supply in terms of Ml+, M1++, M2, M2+, M2++, and M3 monetary aggregates. What financial assets are included in each of these six aggregates? How does each aggregate ...

Question in a local market the monthly price of internet

Question: In a local market, the monthly price of Internet access service decreases from $20 to $10, and the total quantity of monthly accounts across all Internet access providers increases from 80,000 to 180,000 What i ...

Question debate the relative merits of fixed and floating

Question: Debate the relative merits of fixed and floating exchange rate regimes. From the perspective of an international business, what are the most important criteria for choosing between the systems? Which system is ...

Question suppose two bonds apple inc and samsung

Question: Suppose two bonds (Apple Inc. and Samsung Electronics Co., Lid) are traded in the bond market and Ms. Wilson needs your advice on which one to buy. For the Apple bond, there is a probability of 60% (hat this bo ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As