(Answered) Solve for equilibrium income in economy

Economics

Consider the following model of a particular economy:

C= 90 + 0.6YD; YD=Y-T

I=50

G=100

T=100

C is private consumption, Y income, T taxes, I business investment, G government spending

Solve for equilibrium income in this economy
Compute the value of the (Keynesian) demand multiplier
In an attempt to stimulate economic activity to prevent a recession, the government decides to increase its spending by $50. What would be the new equilibrium output?

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Microeconomics, Economics

Category:- Microeconomics
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