Illustrate if g rises how much would the gdp change

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Reference no: EM1349092

Suppose that the economy is characterised by the following behavioural equations:
C = 160 + 0.6YD
= 150
G = 150
T = 100
Solve for:
a. equilibrium GDP (Y)
b. disposable income (YD)
c. Solve for private and public (government) saving. Do they add up to investment?
d. Assume that G rises to 200. Calculate private, public (government) saving. Do they still add up to investment?

e. Illustrate If G rises to 200 and T rises to 150. How much would the GDP change as a result?

Reference no: EM1349092

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