Assume you have the following model of the expenditure sector: AD = C + I + G + NX C = Co + cYD YD = Y - TA + TR TA = TAo TR = TRo I = Io G = Go NX = NXo If a change in exports by deltaNX = - 200 is accompanied by a change in consumption by ∆C = - 800, what is the size of the expenditure multiplier?
Assume you have the following model of the expenditure sector: AD = C + I + G + NX C = Co + cYD YD = Y - TA + TR TA = TAo TR = TRo I = Io G = Go NX = NXo If a change in exports by deltaNX = - 200 is accompanied by a change in consumption by ∆C = - 800, what is the size of the expenditure multiplier?
Chapter23: The Aggregate Expenditure Model
Section: Chapter Questions
Problem 10P
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Assume you have the following model of the expenditure sector:
AD = C + I + G + NX
C = Co + cYD
YD = Y - TA + TR
TA = TAo
TR = TRo
I = Io
G = Go
NX = NXo
If a change in exports by deltaNX = - 200 is accompanied by a change in consumption by ∆C = - 800, what is the size of the expenditure multiplier?
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