Equilibrium level of income or gdp


Please help answer the given problem.

Assume the following open economy

C = 300 + 0.80(Y - 125)

I = 150

G = 250

X =115

M = 125+.05Y

Problem 1: Determine (solve for) the equilibrium level of income or GDP (Y).

Problem 2: Determine the impact on income of a 50 increase in government spending from 250 to 300.

Problem 3: Using the original data, compute the impact of a 50 decrease in taxes from 125 to 75.

Problem 4: If the government seeks to raise income to 3,000, how much should it raise government spending?

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Macroeconomics: Equilibrium level of income or gdp
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