## 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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