Answer to Question #306439 in Macroeconomics for vaish

Question #306439

If

Consumption function C= 100+ 0.5Yd

TaxT= 100

InvestmentI= 200

ExportX= 120

Government Expenditure G= 150

ImportM= 0.03Y

Find the following:

  1. The equilibrium level of income.
  2. The next exports.
1
Expert's answer
2022-03-07T11:02:41-0500
  1. The equilibrium level of income.

Y=C+I+G+XMY=C+I+G+X-M


C=100+0.5YdC=100+0.5Yd


=100+0.5(YT)=100+0.5(Y-T)


=100+0.5(Y0.03Y)=100+0.5(Y-0.03Y)


Y=100+0.5(Y0.03Y)+200+150+1200.03YY=100+0.5(Y-0.03Y)+200+150+120-0.03Y


Y=100+0.5Y0.015Y)+200+150+1200.03YY=100+0.5Y−0.015Y)+200+150+120−0.03Y


Y=570+0.455YY=570+0.455Y


Y0.455Y=570Y-0.455Y=570


0.545Y=5700.545Y=570


Y=1,045.87Y=1,045.87


2). The next exports.


The value of exports(X)value of imports(M)The \space value \space of \space exports (X) -value \space of \space imports (M)


XMX-M


=120(0.03×1,045.87)=120-(0.03\times 1,045.87)


=12033.38=120-33.38


=88.62= 88.62



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