Question

Y=E

Autonomous expenditure = 3500

Equilibrium income = 9800

Full employment level of income is = 14000

                   i.           Illustrate the above using a well labelled diagram.

                 ii.           What is the value of the multiplier in this economy?

               iii.           Give the equation of the aggregate expenditure line.

               

Answer 1

Y=E

Autonomous expenditure = 3500

Equilibrium income = 9800

Full employment level of income is = 14000

i) The above given information can be used in given information.

ii) The value of the multiplier in this economy