Write down the equilibrium values for:AD*=Y*=C*=I*=G*=T*=m=Marginal propensity to consume=using this (1) c=1000+0.4(y-t)(2) i=500(3) G=400(4) t=300
Question
Write down the equilibrium values for:AD*=Y*=C*=I*=G*=T*=m=Marginal propensity to consume=using this (1) c=1000+0.4(y-t)(2) i=500(3) G=400(4) t=300
Solution
To find the equilibrium values for AD*, Y*, C*, I*, G*, T*, m, and the marginal propensity to consume, we can use the given equations:
(1) c = 1000 + 0.4(y - t) (2) i = 500 (3) G = 400 (4) t = 300
Let's solve for each variable step by step:
-
AD* (Aggregate Demand): AD* = C* + I* + G* Since we don't have the value for C* yet, we'll come back to this equation later.
-
Y* (Equilibrium Output): Y* = AD* Since we don't have the value for AD* yet, we'll come back to this equation later.
-
C* (Consumption): Using equation (1), we substitute the given values for t and solve for C*: C* = 1000 + 0.4(Y* - T*) Substituting the given value for T*: C* = 1000 + 0.4(Y* - 300)
-
I* (Investment): Using equation (2), we substitute the given value for i: I* = 500
-
G* (Government Spending): Using equation (3), we substitute the given value for G: G* = 400
-
T* (Taxes): Using equation (4), we substitute the given value for t: T* = 300
-
m (Marginal Propensity to Consume): The marginal propensity to consume is given as m.
Now, let's go back to equation (1) and substitute the values we have found so far: C* = 1000 + 0.4(Y* - 300)
Next, we substitute the values for C*, I*, and G* into the equation for AD*: AD* = C* + I* + G* AD* = (1000 + 0.4(Y* - 300)) + 500 + 400
Finally, we substitute the value for AD* into the equation for Y*: Y* = AD*
At this point, we have found the equilibrium values for AD*, Y*, C*, I*, G*, T*, and m.
Similar Questions
(1)C=1000+0.4(Y−T)(2)I=500(3)G=400(4)T=300 Write down the equilibrium values for:AD*= , y*= , c*= , I*= , G*=, T*= , M=, MPC=👍👀✅Acein a few secondsLet's solve this step by step:1. The aggregate demand (AD) is the sum of consumption (C), investment (I), and government spending (G). So, AD = C + I + G.2. Substituting the given equations into the AD equation, we get AD = (1000 + 0.4(Y - 300)) + 500 + 400.3. Simplifying this, we get AD = 1400 + 0.4Y.4. In equilibrium, aggregate demand equals income (Y), so we can set AD = Y to find the equilibrium income. Solving the equation 1400 + 0.4Y = Y gives us Y* = 2333.33.5. Substituting Y* into the consumption function gives us C* = 1000 + 0.4(2333.33 - 300) = 1413.33.6. The investment, government spending, and taxes are given as I* = 500, G* = 400, and T* = 300.7. The marginal propensity to consume (MPC) is the slope of the consumption function, which is 0.4 in this case.8. The value for M is not given in the equations, and without additional information, we cannot determine its value.
Consider the following economy:(1) C = 1000 + 0.3 (Y - T)(2) I = 700(3) G = 500(4) T = 400Consumption of equilibrium is:
Consider the following economyC=1000+0.4(Y-T)I=500T=400G=300What is the consumption of equilibrium?
Consider a closed economy:(1) C = 200 + 0.4 (Y-T)(2) I =300(3) G = 400(4) T = 300What is consumption of equilibrium?
Consider the following economy:(1) C = 1000 + 0.3 (Y - T)(2) I = 700(3) G = 500(4) T = 400What is the marginal propensity to consume?
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.