11 An economy has the following consumption function:
C=200 + 0.8 DI
The government budget is balanced, with government purchases and taxes both fixed at $1,000. Net exports are $100. Investment is $600. 
1)Find equilibrium GDP.(1 point)
Calculation Procedure:
2)What is the multiplier for this economy?(1 point)
Calculation Procedure:
3)If G rises by $100, what happens to Y? What happens to Y if both G and T rise by $100 at the same time?(1 point)
Calculation Procedure

    • 12 years ago
    100 % correct answer A+++++++++++++ tutorial
    NOT RATED

    Purchase the answer to view it

    blurred-text
    • attachment
      8521120.doc