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What is the equilibrium level of national income

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Reference no: EM132472916

Consider a simple model showing the following equations for desired consumption, investment and government purchases

C= 300 +0.9Y

I = 100

G= 200

Note: Show your calculations for each answer

a) Complete the table above

b) What is the equilibrium level of national income (Y)? why?

c) If national income (Y) is 4000, what will happen to inventories? Why?

d) What is the value of the simple Multiplier?

e) How much does the value of total output (Y) increase if there in an autonomous increase of 2000 for investment? (Hint use the multiplier).

Reference no: EM132472916

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