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Calculate the numerical value of equilibrium level of income

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Reference no: EM13303266

2. (a) Show your calculations.

• Given the consumption equation, C = 220 + .75Y. Calculate the numerical value of the break-even level of income, YB. 

• Suppose that Investment spending of 420 is added (I = 420). Find Ye1. 

• Then suppose that we find that ΔI = 40. Find Ye2. 

• What is the multiplier effect of ΔI = 40? Explain and show this relationship.

3. (a) Calculate the numerical value of equilibrium level of income (Ye)  if 

C = 485 + .90Y, I = 560, G = 854, EX = 235, and IM = 340. Show your calculations. 

Reference no: EM13303266

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