Consider the following is the economy of Country Z: C = 200 + 0.85Y I = 100 Answer the following questions: Calculate the equilibrium level of output algebraically using the saving-investment (S-I) approach. (b) What is the value of saving at the equilibrium output from part (a)? (c) Suppose the investment increases to 200. What is the new equilibrium level of output? Calculate the value using the multiplier approach.
Consider the following is the economy of Country Z: C = 200 + 0.85Y I = 100 Answer the following questions: Calculate the equilibrium level of output algebraically using the saving-investment (S-I) approach. (b) What is the value of saving at the equilibrium output from part (a)? (c) Suppose the investment increases to 200. What is the new equilibrium level of output? Calculate the value using the multiplier approach.
Chapter19: The Keynesian Model In Action
Section: Chapter Questions
Problem 5SQP
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- Consider the following is the economy of Country Z:
C = 200 + 0.85Y
I = 100
Answer the following questions:
- Calculate the equilibrium level of output algebraically using the saving-investment (S-I) approach.
(b) What is the value of saving at the equilibrium output from part (a)?
(c) Suppose the investment increases to 200. What is the new equilibrium level of output? Calculate the value using the multiplier approach.
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