Answer to Question #12961 in Macroeconomics for Rachel
1. Consider the following simple model of an economy operating with fixed wages, prices, and interest rates, and excess capacity (operating below the full-employment level): where I=900
Where C is consumption, Yd is disposable income (equal to national income, Y, in absence of a government sector), and I is investment.
a) If aggregate expenditures (AE) are a function of Y, calculate the equilibrium level of income.
b) Calculate the value of the multiplier.
a) AE =C+I = 600 +0.6Yd +900= 1500 +0.6Yd b) Multiplier 1/(1-MPC)= 1/0.6=1.67
There are certain things that people in the business world frown upon. Things like lows in the economy, housing crisis,…
APPROVED BY CLIENTS
the price was really affordable but there were few mistakes due to which i lost 20 percent out of 100 but really it was really a great assignment work and in future i will suggest everyone to use your site for help.