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Economy Assignment | Homework For You

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December 13th, 2019

An economy is described by the following equations: C = 6,000 + 0.5 (Y – T) I p = 2,000 G = 4,500 NX = 500 T = 4,000 Y* = 21,000Homework For You

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a. For this economy, find the numerical equation linking planned aggregate expenditure to output.

b. Find the following: autonomous expenditure, the multiplier, short-run equilibrium output, and the output gap.

c. Illustrate this economy’s short-run equilibrium on a Keynesian-cross diagram.

d. Calculate the amount by which autonomous expenditure would have to change to eliminate the output gap.

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e. Suppose that the government decided to close the output gap by increasing taxes. By how much must taxes be increased in order to do this? Get Economics homework help today

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