Calculate the government budget surplus

Reference no: EM13982017

Consider the following aggregate expenditure model of an economy:C = 50 + (8/9)Yd T = (1/4)Y I = 100 G = 150 X = 100 IM = (1/3)Y
where C is consumption, Yd is disposable income, T is taxes, Y is national income,

Yd = 450
Y = 600

Calculate the government's budget surplus or deficit at the equilibrium level of income. Calculate thetrade balance (net exports). Illustrate the trade balance in a diagram of net exports as a function of national income.

Reference no: EM13982017

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