ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Calculate the missing values in the table below given that the Aggregate Consumption Function for a
country is equal toC= 150 + 0.75Y and planned investment is fixed at 300.
Aggregate
Output
(Income) (Y)
Aggregate
Consumption Investment
(C)
Unplanned
Inventory
Change (Y-AE)
Planned
Planned Aggregate
Expenditure (AE)
Equilibrium?
(1)
1,500
300
1,800
300
2,100
300
2,400
300
2,700
300
What is likely to happen to aggregate output if the economy produces above the equilibrium
level? How much is aggregate saving at the equilibrium level?
Calculate the multiplier.
Calculate the new equilibrium if Planned Investment increased by $50M.
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Transcribed Image Text:Calculate the missing values in the table below given that the Aggregate Consumption Function for a country is equal toC= 150 + 0.75Y and planned investment is fixed at 300. Aggregate Output (Income) (Y) Aggregate Consumption Investment (C) Unplanned Inventory Change (Y-AE) Planned Planned Aggregate Expenditure (AE) Equilibrium? (1) 1,500 300 1,800 300 2,100 300 2,400 300 2,700 300 What is likely to happen to aggregate output if the economy produces above the equilibrium level? How much is aggregate saving at the equilibrium level? Calculate the multiplier. Calculate the new equilibrium if Planned Investment increased by $50M.
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