Question #24339
How do I calculate equilibrium national income when given T? For example: C=150+0.9yD yD=.8y I=400 T=0.2y G=700 X=130 IM=0.08y
Expert's answer
The level of equilibrium national income Ye = C + I + G + (X - IM) ,
where C= Consumer spending, I = Investment (Gross fixed Capital
Formation), G= Government Spending, X= Exports and IM= Imports.
Disposable income ( Yd ) is calculated as the difference between personal
income (Y) and personal tax and non tax payments (T).
Y = C + I + G + (X - IM)
Yd= Y - T
Y=150+0.9(Y-T)+400+700+130-0.08Y
Y=150+0.72Y+400+700+130-0.08Y
0,36Y=1 380
Ye=3 833 (the level of equilibrium national income)
where C= Consumer spending, I = Investment (Gross fixed Capital
Formation), G= Government Spending, X= Exports and IM= Imports.
Disposable income ( Yd ) is calculated as the difference between personal
income (Y) and personal tax and non tax payments (T).
Y = C + I + G + (X - IM)
Yd= Y - T
Y=150+0.9(Y-T)+400+700+130-0.08Y
Y=150+0.72Y+400+700+130-0.08Y
0,36Y=1 380
Ye=3 833 (the level of equilibrium national income)
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#339914 on Dec 2023
#339914 on Dec 2023
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How can i draw rough graphs and mark the equilibriums using information in a. and d. using aggregate expenditure curve and the 45-degree line? Suppose an economy is open and has prior information as follows. Y = C + I + G + (X-M) Given that C = C0 + C1Yd and Yd = Y-T, C0 = 20; C1 = 0.8; I = I0 = 80; G = G0 = 80; T = T0 = 50; X = X0 = 20; M = M0 + M1Y; M0 = 20; M1 = 0.25