Consider the following is the economy of Country W: C = 100 + 0.8Y I = 150 Answer the following questions: a) Determine the equilibrium level of output algebraically using the aggregate expenditure approach. b) Graphically illustrate the equilibrium level of output from part (a). c) Suppose that the initial aggregate output is 550. Calculate the change in inventories that will occur in this period.

Consider the following is the economy of Country W: C = 100 + 0.8Y I = 150 Answer the following questions: a) Determine the equilibrium level of output algebraically using the aggregate expenditure approach. b) Graphically illustrate the equilibrium level of output from part (a). c) Suppose that the initial aggregate output is 550. Calculate the change in inventories that will occur in this period.

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter11: Managing Aggregate Demand: Fiscal Policy

Section11.B: Algebraic Treatment Of Taxes And Fiscal Policy

Problem 1TY

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