Calculate the equilibrium level of income

Assignment Help Business Economics

Reference no: EM131094573

Assume consumption is represented by the following: C = 400 + .5Y. Also assume that planned investment (I) equals 100.

(a)Given the information, calculate the equilibrium level of income.

(b) Given the information, calculate the level of consumption and saving that occurs at the equilibrium level of income.

Reference no: EM131094573

Questions Cloud

Which investment opportunity should sam opt for : Sam has three investment opportunities. The first one will require an initial cost of $100,000 and will return $150,000 one year from now. The second investment requires an outlay of $200,000 and will return $300,000 after one year. Which investment ..

Opportunity cost of producing a bottle of wine : Terms of trade Suppose that France and Germany both produce oil and wine. France's opportunity cost of producing a bottle of wine is 5 barrels of oil while Germany's opportunity cost of producing a bottle of wine is 10 barrels of oil.

Expected inflation rate are unchanged : Suppose the real interest rate is 4% and the expected inflation rate is 3%. If the money supply increases by 10% and output, the real interest rate, and the expected inflation rate are unchanged, then the price level increases by

What are heuristics : What are heuristics? How do they help the brain function? List and describe three common heuristics and how they work. Explain your answers.

Calculate the equilibrium level of income : Assume consumption is represented by the following: C = 400 + .5Y. Also assume that planned investment (I) equals 100. Given the information, calculate the equilibrium level of income. Given the information, calculate the level of consumption and sav..

Increase trade and increase in trade deficit : A bilateral agreement has enabled China and South Korea to increase trade and increase in a trade deficit with the United States, what are some of the advantages and disadvantages for the United States?

Created as an unfunded or pay-as-you-go plan : Social security was created as an “unfunded” or “pay-as-you-go” plan. Explain how an “unfunded plan works. Suppose we suddenly ended social security today. How would the return earned by the last generation of retirees compare to that earned by the f..

Diminishing marginal returns and diseconomies of scale : What is the difference between "diminishing marginal returns" and "diseconomies of scale"?

An important employment level is called full employment : An important employment level is called full employment.

User Account

All Pages