C = 2,800 + 0.9y

I = 750
G = 1,200
NX = 150

Given the equations for C, I, G, and NX above, what is the equilibrium level of GDP (Y)?

What will be an ideal response?


Y = C + I + G + NX.
Y = 2,800 + 0.9Y + 750 + 1,200 +150.
Y = 4,900 + 0.9Y.
0.1Y = 4,900.
Y = 49,000.

Economics

You might also like to view...

The ________ measures the change in the demand of a good due to a percentage change in the consumer's income

A) substitution effect of a price change B) income effect of a price change C) cross-price elasticity of demand D) income elasticity of demand

Economics

When the exchange rate moves from $1 = CAD1.5 to $1 = CAD1.66, it implies:

a. the U.S. dollar has depreciated in relation to the Canadian dollar. b. U.S. imports of Canadian goods will rise. c. the dollar price of the Canadian dollar has risen. d. the Canadian dollar has appreciated in relation to the U.S. dollar. e. Canadian imports of U.S. goods will rise.

Economics

Which of the following is an example of menu costs?

a. deciding on new prices b. printing new price lists c. advertising new prices d. All of the above are examples of menu costs.

Economics

Which of the following was NOT a cause or a characteristic of the 1994/95 Mexican peso crisis?

A) An overvalued exchange rate B) An inflow of large foreign portfolio capital C) The inability of the IMF, the world bank, and the NAFTA member countries (i.e., the United States and Canada) to predict the looming financial crisis D) Shifts by the world capital markets toward more conservative and risk-averse investments because of interest and exchange rate movements around the world

Economics