ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question
. Suppose the United States economy is repre- sented by the following equations:
Z = C + I + G, C = 500 + 0.75YD, T = 600, I = 300,
YD = Y − T , G = 2000
- Given the above variables, calculate the equilibrium level of output.
- assume that government spending decreases from
2000 to 1900. What is the new equilibrium level of output? How much does income change as a result of this event? What is the multiplier for this economy?
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