Consumption expenditure: Investment expenditure: C = 100 +0.8 Yª I= 120 - 500I Lump-sum taxes: T=150 Current account Government budget balance Money demand Deficit of 50 MD = 200 - 2000 i + 0.1Y| Money supply: M= 100 Vhere i is the interest rate, Y is the real GDP; Ya is the disposable income Suppose government expenditure (G) rises by 50 $ because of increased expenditure on education. What is the new equilibrium Y? Select one: O a. 1444.44 cross out cross out O b. 2000 cross out O c. 2444.28 cross out O d. 4400 cross out O e. 4600.54

Consumption expenditure: Investment expenditure: C = 100 +0.8 Yª I= 120 - 500I Lump-sum taxes: T=150 Current account Government budget balance Money demand Deficit of 50 MD = 200 - 2000 i + 0.1Y| Money supply: M= 100 Vhere i is the interest rate, Y is the real GDP; Ya is the disposable income Suppose government expenditure (G) rises by 50 $ because of increased expenditure on education. What is the new equilibrium Y? Select one: O a. 1444.44 cross out cross out O b. 2000 cross out O c. 2444.28 cross out O d. 4400 cross out O e. 4600.54

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section: Chapter Questions

Problem 6TY

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