Reference no: EM13695063
A closed economy with government is described by the following functions:
C=200+0.75Yd, I=150, G=250, TR=100, TA=0.1Y, NX=25
Where, C=consumption, Yd=disposable income, I=planned investment,
G= government purchases of goods and services, TR=government transfers, TA= government taxes and NX=Net exports
a) What is the equation for aggregate demand (AD) for this economy?
b) Calculate the equilibrium level of income and the multiplier.
c) Calculate the size of the budget surplus (or deficit) for the economy
d) What is the level of savings in equilibrium?
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