Statistics Help
Question: Suppose the economy can be described by the following equations (all values are billions of dollars per quarter)
C = 300 + 0.6(Y-T) EX = 420 I = 500 + 0.15Y IM = 100 + 0.25Y G = 500 T=200
a. What is the equilibrium level of output and income
b. G increases to 520, what is the new level of output and what is the expenditure multiplier Edit
Answer: I will answer the first one for your help
a) Expenditure= C+I+G+(X-M)
Y= 300+0.6 (Y-200)+500 + 500 +420 - 100
Or, Y= 1300 +0.6Y- 120 +320
Or, 0.4Y= 1500
Or, Y= 3750 Edit
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