What is the new equilibrium income

Reference no: EM131136572

Suppose the consumption behavior in problem 1 changes so that C 100 .9 Y , while I remains at 50.

a. Is the equilibrium level of income higher or lower than it was in problem 1( a )? Calculate the new equilibrium level, Y , to verify this.

b. Now suppose investment increases to I 100, just as in problem 1( d ). What is the new equilibrium income?

c. Does this change in investment spending have more or less of an effect on Y than it did in problem 1? Why?

d. Draw a diagram indicating the change in equilibrium income in this case.

Reference no: EM131136572

Questions Cloud

Determine the company total profit for the year : A construction company has total revenues of $1,150,000, total construction costs of $956,000, and general overhead costs of $159,000 for the year. Determine the company’s total profit for the year and the percentage of the construction revenues that..

Calculate the heat flux from the surface : A 1 m long flat plate is heated with an electrical heater which supplies a uniform heat flux. Air at 25°C is flowing over the surface with a velocity 50 m/s. Plate surface temperature at x = 0.1 m is measured as: Tr = 71°C. Calculate the heat flux..

What is the equilibrium level of income in this case : If I rises to 100 (we discuss what determines I in later chapters), what will the effect be on the equilibrium income?

What is in the food item you have selected : What is in the food item you have selected? Look at the following: http://ndb.nal.usda.gov/ Suppose Mayo Clinic wisdom and biblical wisdom seem to conflict. Which source will you defer to and why?

What is the new equilibrium income : Is the equilibrium level of income higher or lower than it was in problem 1( a )? Calculate the new equilibrium level, Y , to verify this.

How we benefit from bacteria living on or inside our bodies : Explain how we benefit from bacteria living on or inside our bodies. Please research and give background information on the Human Microbiome Project:

What makes it keynesian, as opposed to classical : We call the model of income determination developed in this chapter a Keynesian one. What makes it Keynesian, as opposed to classical?

Prepare a paper about human evolution and human prehistory : Prepare a research paper about human evolution and human prehistory. Your main literature sources should be academic books and journals.

5 ways to improve parent involvement in k12 learning : Write a persuasive essay on the topic "5 Ways to Improve Parent Involvement in K-12 Learning"

User Account

All Pages