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For a income determination model Y = C+ I + G, C = Co + bY d, I = Io+ aYd. Yd = Y - T, T = To + tY, G = Go, 0 < a, b, t < 1, find the equilibrium level of income. Find the multipliers for each input.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter17: Income, Poverty, And Health Care

Section: Chapter Questions

Problem 1P

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Question

For a income determination model Y = C +I + G, C = Co + bY d, I = Io + aYd,
Yd = Y – T, T = To +tY, G = Go, 0 < a, b, t < 1, find the equilibrium level of income. Find the
multipliers for each input.

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