Suppose the economy is determined by the following consumption and investment equations. C = 100+ 0.8Y Lp = 200 Suppose GDP (i.e. production) was not in equilibrium, but instead at 2000. Calculate the change in inventory that would occur this year. Inventory would rise by 100 Inventory would rise by 200 Inventory would fall by 100 Inventory would fall by 200

Suppose the economy is determined by the following consumption and investment equations. C = 100+ 0.8Y Lp = 200 Suppose GDP (i.e. production) was not in equilibrium, but instead at 2000. Calculate the change in inventory that would occur this year. Inventory would rise by 100 Inventory would rise by 200 Inventory would fall by 100 Inventory would fall by 200

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section9.A: The Simple Algebra Of Income Determination And The Multiplier

Problem 4TY

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