(Four Sector Model) : The major macro aggregates for an economy are given as follows : Consumption, C = 60 + 0.8Y,(Y,is disposable income) Investment I = 100 – 5i % Interest rate i = 6 Imports Government expenditure, G= 76 M=12+0.2Y Lump-sum Tax, T= 15 Transfer payments, TR = 60 1. Derive the lIS curve using the abo ve data Exports X = 70 2. Calculate equilibrium level of inc ome 3. Calculate foreign trade multiplier

(Four Sector Model) : The major macro aggregates for an economy are given as follows : Consumption, C = 60 + 0.8Y,(Y,is disposable income) Investment I = 100 – 5i % Interest rate i = 6 Imports Government expenditure, G= 76 M=12+0.2Y Lump-sum Tax, T= 15 Transfer payments, TR = 60 1. Derive the lIS curve using the abo ve data Exports X = 70 2. Calculate equilibrium level of inc ome 3. Calculate foreign trade multiplier

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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