Equations of macro model, Compute the AE function and

Equations of macro model

Assignment Help Macroeconomics

Reference no: EM1314444

The equations of the model are:

C = 50 + 0.7V_D T={0.2}Y

1 = 75 X = 50

G = 100 IM = {0A5)Y

a. Compute the AE function and plot it in a diagram. What is total autonomous expenditure?

b. What is the slope of the AE function?

c. Compute the equilibrium level of national income.

d. Suppose X rises from 50 to 100. How does this affect the level of national income?

e. What is the simple multiplier in this model?

Reference no: EM1314444

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