Sketch equilibrium position using two-dimensional graph, Microeconomics

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Sketch equilibrium position using two-dimensional graph

Consider a simple Keynesian income-spending model of an economy described by the following equations

C = 210 + 0.75Yd
I= 300
G= 425
TR= 120
T= 100
M = 0.15Y
X= 220

(a) Calculate the equilibrium level of income. Sketch this equilibrium position using a two-dimensional graph.

(b) Suppose the government reduces public expenditure by 50. Estimate the change in the equilibrium level of income? What is the new equilibrium level of income?

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Microeconomics: Sketch equilibrium position using two-dimensional graph

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Microeconomics: Sketch equilibrium position using two-dimensional graph

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Microeconomics: Sketch equilibrium position using two-dimensional graph

Reference No:- TGS059239

Recent Questions Asked Microeconomics

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