Consider the following model. Expenditure is given by: E=C+I+G. The consumption function is specified as: C = c0 +cY. We assume a closed macroeconomics system so that: Y=E. If the model parameters are configured such that I= 500, G=2000, c0-1000 and c=0.8, what will the level of consumption expenditure, C, be equal to? a. 4,375 b. 15,000 c. 14,000 Cd. 14,500
Consider the following model. Expenditure is given by: E=C+I+G. The consumption function is specified as: C = c0 +cY. We assume a closed macroeconomics system so that: Y=E. If the model parameters are configured such that I= 500, G=2000, c0-1000 and c=0.8, what will the level of consumption expenditure, C, be equal to? a. 4,375 b. 15,000 c. 14,000 Cd. 14,500
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Consider the following model. Expenditure is given by: E = C +1 + G.
The consumption function is specified as: C = c0 +cY. We assume a
closed macroeconomics system so that: Y=E. If the model parameters
are configured such that I= 500, G=2000, c0=1000 and c=0.8, what will
the level of consumption expenditure, C, be equal to?
a. 4,375
b. 15,000
c. 14,000
Cd. 14,500](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd0fc3b73-eb79-49b6-bfe0-d41394542210%2F99d0159e-d726-49c4-b21a-271d8cf3bf9d%2F8ls1dt_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Consider the following model. Expenditure is given by: E = C +1 + G.
The consumption function is specified as: C = c0 +cY. We assume a
closed macroeconomics system so that: Y=E. If the model parameters
are configured such that I= 500, G=2000, c0=1000 and c=0.8, what will
the level of consumption expenditure, C, be equal to?
a. 4,375
b. 15,000
c. 14,000
Cd. 14,500
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