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Find equilibrium level of GDP.




C=120+0.80DI;I=320;G=480;(X-IM)=-80;T=200+0.25Y;A) Find equilibrium level of GDP. Next, find the multiplier for government purchases and for fixed taxes. If full employment comes at Y= 1800, what are some policies that would move GDP to the level?;B) This question is a variant of the previous problem that approaches things in the way that a fiscal policy planner might. In an a economy whose consumption funtion and tax function are given in the question A (above), with investment fixed at 320 and net exports fixed at -80, find the value of G that would make GDP equal to 1800?


Paper#28057 | Written in 18-Jul-2015

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