Holding medic and feduc fixed

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Q1. Suppose that for a particular economy and period, investment was equal to 200, government expenditure was equal to 100, net taxes were fixed at 150, and consumption was given by the consumption function c=20+0.6Yd where Yd is disposable income and Y is GDP. What is the level of equilibrium income?

Q2. Do sibs have the expected effect? Explain. Holding medic and feduc fixed, by how much do sibs have to increase to reduce predicted years of education by one year?

Reference no: EM136509

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