# Answer to Question #59598 in Macroeconomics for ali

Question #59598

The Grand Multiplier:

c = 0.6

t = 0.2

m = 0.1

AEo = 20,000.

Determine Y...

c = 0.6

t = 0.2

m = 0.1

AEo = 20,000.

Determine Y...

Expert's answer

c = 0.6

t = 0.2

m = 0.1

AEo = 20,000.

AE = C = c*Y = AEo + c*(Y - T) = AEo + c*(1 - t)*Y,

0.6Y = 20,000 + 0.6*(1 - 0.2)*Y,

0.12Y = 20,000,

Y = 20,000/0.12 = 166,666.67.

t = 0.2

m = 0.1

AEo = 20,000.

AE = C = c*Y = AEo + c*(Y - T) = AEo + c*(1 - t)*Y,

0.6Y = 20,000 + 0.6*(1 - 0.2)*Y,

0.12Y = 20,000,

Y = 20,000/0.12 = 166,666.67.

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