A simple macro-economic model is given by Y = C+1+G C = 10 + 0.4Yd | = 25+ 0.2Y Yd = Y -T T= 10 + 0.1Y G = 20 By eliminating G ,T & Yd from the equations, reduce the system to three equations in three unknown and hence use Cramer's rule to find the equilibrium values of Y, C, I. Is there any government budget deficit?

A simple macro-economic model is given by Y = C+1+G C = 10 + 0.4Yd | = 25+ 0.2Y Yd = Y -T T= 10 + 0.1Y G = 20 By eliminating G ,T & Yd from the equations, reduce the system to three equations in three unknown and hence use Cramer's rule to find the equilibrium values of Y, C, I. Is there any government budget deficit?

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section: Chapter Questions

Problem 4TY

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