TABLE 2. Finding Equilibrium After a $30 Billion Investment Spending Decrease (All Figures in Billions of Dollars) Fill in Cells & Find Equilibrium Y=AE 1 2 3 4 5 6 7 8 OUTPUT NET DISPOSABLE CONSUMPTION INVESTMENT GOVERNMENT AGGREGATE SAVING S (INCOME) TAXES INCOME SPENDING EXPENDITURE PURCHASES G Y T Yd=Y-T C=150+.85Yd (Ya-C) I C+1+G 1,500 1,700 2,000 2,200 9 INVENTORY CHANGE Y-(C+I+G) 10 ADJUSTMENT TO Disequilibrium

TABLE 2. Finding Equilibrium After a $30 Billion Investment Spending Decrease (All Figures in Billions of Dollars) Fill in Cells & Find Equilibrium Y=AE 1 2 3 4 5 6 7 8 OUTPUT NET DISPOSABLE CONSUMPTION INVESTMENT GOVERNMENT AGGREGATE SAVING S (INCOME) TAXES INCOME SPENDING EXPENDITURE PURCHASES G Y T Yd=Y-T C=150+.85Yd (Ya-C) I C+1+G 1,500 1,700 2,000 2,200 9 INVENTORY CHANGE Y-(C+I+G) 10 ADJUSTMENT TO Disequilibrium

Macroeconomics: Principles and Policy (MindTap Course List)

13th Edition

ISBN:9781305280601

Author:William J. Baumol, Alan S. Blinder

Publisher:William J. Baumol, Alan S. Blinder

Chapter16: Budget Deficits In The Short And Long Run

Section: Chapter Questions

Problem 1DQ

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