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QUESTION 3 Assume function is as follow: C = 500 + 0.75Yd a) Determine the national...

QUESTION 3 Assume function is as follow: C = 500 + 0.75Yd

a) Determine the national income if investment is 200.

b) Draw the national income equilibrium (consumption and saving curves) based on information in (a).

c) The following are some assumptions for an economy:

• Marginal propensity to consume (MPC) is 0.75.

• Autonomous consumption is RM5,000 million.

• Autonomous investment is RM2,500 million.

What is the level of national income which will achieve equilibrium?

d) Calculate the level of output or national income equilibrium for an open economy model.

C = 500 + 0.5Yd T = 100 G = 100 I = 100 X = 100 M = 50 + 0.2Y

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Rahul Sunny answered 1 year ago
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