1 answer

Income Or Output Y Consumption Expenditure         C Investment Expenditure       I Government Expenditure          G...

Question:

Income

Or

Output

Y

Consumption

Expenditure

        C

Investment

Expenditure

      I

Government

Expenditure

         G

Net export

Expenditure

       NX

$4,000

3,925

100

100

25

4,100

4,000

100

100

25

4,200

4,075

100

100

25

4,300

4,150

100

100

25

4,400

4,225

100

100

25

4,500

4,300

100

100

25

4,600

4,375

100

100

25

4,700

4,450

100

100

25

4,800

4,525

100

100

25

4,900

4,600

100

100

25

5,000

4,675

100

100

25

c) If government expenditure grows to $150, what will be the new equilibrium level of income?


Answers

Y C I G NX AE = C+I+G+NX
4000 3925 100 150 25 4200
4100 4000 100 150 25 4275
4200 4075 100 150 25 4350
4300 4150 100 150 25 4425
4400 4225 100 150 25 4500
4500 4300 100 150 25 4575
4600 4375 100 150 25 4650
4700 4450 100 150 25 4725
4800 4525 100 150 25 4800
4900 4600 100 150 25 4875
5000 4675 100 150 25 4950

c) If government expenditure grows to $150, the new equilibrium level of income is $4,800.

Equilibrium occurs where, Y = AE

.

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